The multiplier for a futures contract on a stock market index is $135. The maturity of the contract is 1 year, the current level of the index is 1,970, and the risk-free interest rate is 0.6% per month. The dividend yield on the index is 0.3% per month. Suppose that after 1 month, the stock index is at 1,990.
a. Find the cash flow from the mark-to-market proceeds on the contract. Assume that the parity condition always holds exactly. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
b. Find the holding-period return if the initial margin on the contract is $6,700.
Answers: 2
Business, 22.06.2019 06:40
Self-interest achieve society’s economic goals because producers know which goods consumers want the most. as consumers and producers exercise their freedom to act in their own self-interest, markets will produce the desired goods at the lowest possible cost. consumers and producers both operate based on society’s economic goals. consumers know which goods can be produced at the lowest cost. there is a wide variety of desired goods and services in a market system because producers determine what to produce. consumers change their minds frequently. there is always a need to produce something new and improved. individual wants are diverse. what is produced is ultimately determined by consumers, because if the goods offered are not what consumers want, consumers will not buy them. producers, because they are driven by profits. producers, because they determine what to produce. consumers, because they participate in marketing surveys.
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Business, 22.06.2019 20:20
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Business, 22.06.2019 22:10
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Business, 22.06.2019 22:50
For 2016, gourmet kitchen products reported $22 million of sales and $19 million of operating costs (including depreciation). the company has $15 million of total invested capital. its after-tax cost of capital is 10%, and its federal-plus-state income tax rate was 36%. what was the firm’s economic value added (eva), that is, how much value did management add to stockholders’ wealth during 2016?
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The multiplier for a futures contract on a stock market index is $135. The maturity of the contract...
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