User Account

All Pages

What should have been the futures price

Assignment Help Accounting Basics
Reference no: EM133008854

Question - A futures contract on a share, which pays dividend at a continuously compounded rate of 4%, is written when the share has a price of $650, and the continuously compounded risk-free interest rate is 6%. The contract is priced at $655 and expires in 6 months.

(a) What should have been the futures price?

(b) Demonstrate how you could execute an arbitrage transaction and calculate arbitrage profit.

(c) Calculate the annualized return on such a transaction.

Reference no: EM133008854

Questions Cloud

How plan to facilitate making contact with a nurse leader : How plan to facilitate making contact with a nurse leader and post a draft change project that willl impact quality improvement as a narrative for students
Prepare the journal entry to record Novak expenses : Novak Inc.'s weekly payroll of $18,000 included employee income taxes withheld of $2,635, Prepare the journal entry to record Novak expenses
Understand regarding the diagnosis of adhd : You are a counselor in a child and adolescent center. Your boss asks you to see a mother with a 3-year-old son. The mother brings her son to your office, and th
Discuss how undergraduate education in liberal arts : Discuss how undergraduate education in liberal arts and science studies contributes to the foundation of nursing knowledge and prepares nurses to work
What should have been the futures price : A futures contract on a share, which pays dividend at a continuously compounded rate of 4%, What should have been the futures price
How the american cancer society or acs might provide : How the American Cancer Society or ACS might provide. What factors contribute to the yearly incidence and mortality rates of various cancers in Americans.
Describe the side effects of treatment : Describe the diagnosis and staging of cancer. Describe the side effects of treatment, and methods to lessen physical and psychological effects.
International recruitment strategy : What are some of the major concepts that should be implemented as part of an international recruitment strategy? Give specific examples of each.
What happens when an auditor identifies fraud : Question - What happens when an auditor identifies fraud during an audit engagement? Or instances of illegal acts by clients

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd