Business, 05.11.2020 18:30 loraine8401

What should a trader do when the one-year forward price of an asset is too low? Assume that the asset provides no income. A. The trader should borrow the price of the asset, buy one unit of the asset and enter into a short forward contract to sell the asset in one year.
B. The trader should borrow the price of the asset, buy one unit of the asset and enter into a long forward contract to buy the asset in one year.
C. The trader should short the asset, invest the proceeds of the short sale at the risk-free rate, enter into a short forward contract to sell the asset in one year
D. The trader should short the asset, invest the proceeds of the short sale at the risk-free rate, enter into a long forward contract to buy the asset in one year

Answers: 3

Show answers

Another question on Business

Business, 22.06.2019 10:30

The card shoppe needs to maintain 21 percent of its sales in net working capital. currently, the store is considering a four-year project that will increase sales from its current level of $349,000 to $408,000 the first year and to $414,000 a year for the following three years of the project. what amount should be included in the project analysis for net working capital in year 4 of the project?

Answers: 3

Answer

Business, 22.06.2019 20:00

Harry is 25 years old with a 1.55 rating factor for his auto insurance. if his annual base premium is $1,012, what is his total premium? $1,568.60 $2,530 $1,582.55 $1,842.25

Answers: 1

Answer

Business, 22.06.2019 23:10

Which of the following best explains the purpose of a strike? a. to pressure employers to increase the minimum wage. b. to make sure that producers don't make any profit. c. to get employers to submit to collective bargaining. d. to prevent employers from taking industrial action.

Answers: 2

Answer

Business, 23.06.2019 02:00

One country has a comparative advantage over another country in the production of a good if ithas a curved production possibilities curve and the other country has a linear production possibilities curve.has lower fixed costs than the other country. has a linear production possibilities curve and the other country has a curved production possibilities curve.is a lower opportunity cost producer of the good.

Answers: 1

Answer

You know the right answer?

What should a trader do when the one-year forward price of an asset is too low? Assume that the asse...

Questions