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Please find the total yield(%) on the initial investment for the given contract (per 1000 ton contract) details: The expiring Coal one-year forward contract future
Please find the total yield(%) on the initial investment for the given contract (per 1000 ton contract) details: The expiring Coal one-year forward contract future price (at inception) was $210.00 per ton, and the spot price (at inception) was $200.00. The settlement price for the contract is $214 per ton. A margin of 5% of the face value ($210,000) of the contract was deposited in form of a T-bill earning 3% for the year.
a. 15% | ||
b. 41% | ||
c. 95% | ||
d. -2% |
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