FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose that a one-year forward contract is entered into for a commodity X with a spot price at that time of 1000. Say after 3

Suppose that a one-year forward contract is entered into for a commodity X with a spot price at that time of 1000. Say after 3 months that the spot price for X has increased to 1030. If we assume a force of interest rate of 4%, find the value of the short position in the forward contract after 3 months.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Forward price after 3 months 1000 ... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Smith and Roberson Business Law

Smith and Roberson Business Law

Authors: Richard A. Mann, Barry S. Roberts

15th Edition

1285141903, 1285141903, 9781285141909, 978-0538473637

More Books

Students also viewed these Finance questions

Question

★★★★★
Find one vector that will make each into a basis for the space. (a) (b) (c) (x, 1 + x2, ) in P2 (!),v) in R2 V) in

Answered: 1 week ago

Question

★★★★★
A steel bar of thickness h is welded to a vertical support as shown in the figure. What is the shear stress in the throat of the welds due to the forceF? 40 kip in 16 2 in 4 in

Answered: 1 week ago

Question

★★★★★
KYC's stock price can go up by 15 percent every year, or down by 10 percent. Both outcomes are equally likely. The risk free rate is 5 percent, and the current stock price of KYC is 100. (a) Price a...

Answered: 1 week ago

Question

★★★★★
Fletcher Fabrication, Inc., produces three products by a joint production process. Raw materials are put into production in Department X, and at the end of processing in this department, three...

Answered: 1 week ago

Question

★★★★★
What amount would you have if you deposited $2,500 a year for 30 years at 8 percent (compounded annually)? (Use the Chapter 1 appendix.)

Answered: 1 week ago

Question

★★★★★
What are the differences between push, pull and hybrid systems?

Answered: 1 week ago

Question

★★★★★
Contrast the cognitive therapy approach with other major therapy approaches.

Answered: 1 week ago

Question

★★★★★
Refer to Exercise. In Exercise, Larcker Manufacturings cost accountant has provided you with the following information for January operations: Direct materials . . . . . . . . . . . . . . . . . . . ....

Answered: 1 week ago

Question

★★★★★
GDP measures: The total market value of all final goods and services produced within a country in a given period. The total amount of money in circulation The total income earned by a nation's...

Answered: 1 week ago

Question

★★★★★
House Corporation has been operating profitably since its creation in 1960. At the beginning of 2019, House acquired a 70 percent ownership in Wilson Company. At the acquisition date, House prepared...

Answered: 1 week ago

Question

★★★★★
As the new top management team at GE, you and your team need to determine the best way to manage your international business units. List the main two internationalization choices from class, which...

Answered: 1 week ago

Question

★★★★★
III. Optimizing Performance For the Lodi Winery, you have been asked by management to examine the data collected and analyzed in the previous modules. The mobjective is for you to help management...

Answered: 1 week ago

Question

★★★★★
The structure shown below is supported by a steel cable from point B to C. This cable has a diameter of 10mm. The Young's modulus of the cable is 20.6x1010N/m2. Determine how much the cable stretches...

Answered: 1 week ago

Question

★★★★★
In a marginal tax rate system, as tax payers make increasing amounts of money, the tax rate they pay on every extra unit of income increases incrementally as their income passes certain cutoffs (...

Answered: 1 week ago

Question

★★★★★
1. The form of competition applies to price, speed, quality, flexibility and innovation. Please explain the form of competition as mentioned earlier in the FnB2. To produce a superior quality product...

Answered: 1 week ago

Question

★★★★★
have taken a snip of the problem and my coding. My code does not include the residual row and the values that come from my code do not match the output. 5.6 LAB: Regression with categorical...

Answered: 1 week ago

Question

★★★★★
Pittsburgh-Walsh Company (PWC) is a manufacturi Division assembles units for the upscale and mid-range markets ng com pany whose product line consists of lighting fixtures and electronic timing...

Answered: 1 week ago

Question

★★★★★
The activities listed in lines 2125 serve primarily as examples of A) Underappreciated dangers B) Intolerable risks C) Medical priorities D) Policy failures

Answered: 1 week ago

Question

★★★★★
Richard Brobston was hired by Insulation Corporation of America (ICA) in 1999. Initially, he was hired as a territory sales manager but was promoted to national account manager in 2003 and to general...

Answered: 1 week ago

Question

★★★★★
A bylaw of Betma Corporation provides that no shareholder can sell his shares unless he first offers them for sale to the corporation or its directors. The bylaw also states that this restriction...

Answered: 1 week ago

Question

★★★★★
Donald Petersen joined his father, William Petersen, in a chicken hatchery business William had previously operated as a sole proprietorship. When the partnership was formed, William contributed the...

Answered: 1 week ago

Question

★★★★★
In 2000 BP announced a change of logo style for all their petrol stations. Speculate, based on a review of available published material, on the management process that led to this decision.

Answered: 1 week ago

Question

★★★★★
It has been said that corporations can do well by doing good. What might be meant by this?

Answered: 1 week ago

Question

★★★★★
Consider the idea that image and reputation may arise for corporation, product, or person. How does this differ from the concept of brand?

Answered: 1 week ago

Previous Question Next Question