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Whirlpool needs Hot Coiled Roil to produce washing machines. The company expects to buy 113 units of steel 2.99 months from now. The company has
Whirlpool needs Hot Coiled Roil to produce washing machines. The company expects to buy 113 units of steel 2.99 months from now. The company has an existing long forward to buy such 113 units at a price of 130.34 for delivery 2.99 month from now.
The yearly CCIR is 5.98% and Steel has a continuous dividend yield of 1.58%. The current price of 1 unit of Hot Roiled Coil is $148.16.
Compute the value of the existing forward.
The yearly CCIR is 5.98% and Steel has a continuous dividend yield of 1.58%. The current price of 1 unit of Hot Roiled Coil is $148.16.
Compute the value of the existing forward.
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To compute the value of the existing forward contract we can use the formula for the p...
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Intermediate Accounting
Authors: Beechy Thomas, Conrod Joan, Farrell Elizabeth, McLeod Dick I
Volume 1, 6th Edition
1259103250, 978-1259103254, 978-0071339476
