4. GN Power is a generating company and LANECO is a retailer. These two companies are negotiating a long-term contract for the delivery of electricity and both forecast that the average spot price for the duration of the contract will be 20.00 $/MWh. If GN Power is less risk averse than LANECO, what is the price that is more likely to result from these negotiations: A. 21. 00 $/MWh В. 20.00 $/MWh С. 19. 00 $/MWh. Both of these companies must physically trade through the WESM, but they have signed a two-way contract for difference for 100 MWh at 20. 00 $/MWh. If everything happens as planned, describe how trading is settled if the price on the WESM is 23. 00 $/MWh.

4. GN Power is a generating company and LANECO is a retailer. These two companies are negotiating a long-term contract for the delivery of electricity and both forecast that the average spot price for the duration of the contract will be 20.00 $/MWh. If GN Power is less risk averse than LANECO, what is the price that is more likely to result from these negotiations: A. 21. 00 $/MWh В. 20.00 $/MWh С. 19. 00 $/MWh. Both of these companies must physically trade through the WESM, but they have signed a two-way contract for difference for 100 MWh at 20. 00 $/MWh. If everything happens as planned, describe how trading is settled if the price on the WESM is 23. 00 $/MWh.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Consider a buyer and a seller meeting to exchange a product. The seller has a minimum willing to sell ( WTS) of $39.50, while the buyer has a maximum willingness to pay ( WTP) of $87.00. If they agree on the price ( P) of $69.80, then the total surplus is $ P WTS WTP 10 20 30 40 50 60 70 80 90 O A. 56.75 O B. 47.50 O C. 17.20 O D. 4130
Target EV is $200M and Reference EBITDA Adj. $11M. During the valuation call the buyer discloses $20M in quantified synergies. (a) What is the initial multiple? (b) What is the post-synergy multiple? (c) Do we accept the valuation? Plz solve all parts otherwise don't solve...
5. Calçulate the net position from a single strategy that-consist-of-one contract a, one contract b-and two contract e. Here are the- contracts speeifieation: Contract a: Purchase-of a call with strike price-of $105 and a premium of $3. Contract b: Purehase of a put with a strike price of $95 and a premium of $7: Contract c: Writing a call with a strike price of $100 and a premium of $4.
XYZ Company is offered to purchase ABC Company with EPS of Php12 and P/E ratio of 5; while DEF Company has EPS of Php15 and P/E ratio of 4. What is the value of the two companies? Which one is a better? Why?
Reference the options chain for Caterpillar, Inc. (ticker: CAT) shown below. You sold one contract of the $115 strike call. What is your max profit? State your answer in total dollar terms (i.e., total out-of-pocket cost not factoring transaction costs), not contract-level terms. Your answer should be a dollar amount with two decimal places of accuracy. (Note on viewing table below: You may have to use a horizontal scrollbar to see all of the columns in the table below.) CAT Option Chain Month: Nov 2020 Calls Last Change Bid Ask Volume 12.40 11.75 10.05 +0.74 14.80 15.45 12.05 12.65 9.75 10.10 Open Int. 7.70 +1.70 7.70 8.10 2 Strike Puts Last Change Bid Ask Volume 32 100.00 10.70 -0.27 10.55 10.90 12 154 105.00 13.00 -0.65 12.85 13.25 28 10 211 110.00 15.54 622 115.00 18.64 15.50 15.95 18.40 18.95 Open Int. 426 403 308 292
K Fabulous Fabricators needs to decide how to allocate space in its production facility this year is considering the following contra a. What are the profitability indexes of the projects? b. What should Fabulous Fabricators de? What are the profitability indexes of the projects? The profitability index for contract Ais (Round to be decimal places) Round to two decimal places) The profitablity index for contract Dis The profitability index for contract CH b. What should Fabulous Fabrators do? (Select the best choice below) OA It should take the two projects with the highest profitability indexes C and A OB. Since it has the capacity to do both Band C and NPV NPV is greater than NPV, it should do to and C OC. Since the NPV of A is the largest, it should choose A OD. Since the profitability indes for the largest, it should choose C Data table (Click on the following icon in order to copy its contents into a spread) Contract Use of Facility 100% 55% 45% C $2.02 m $105 min $1.46 milion…
a.) Fair 2 month Forward $125.70 Fair 6 month Forward $126.68 Fair 1 year Forward $113.86 Assume that the information in part (a) is still applicable, but that the forward contracts are trading at the following prices: 2-month forward $125.25 6-month forward $121.77 1-year forward $116.34 Output: Describe the strategy you would use to achieve arbitrage profits (if possible), and calculate the arbitrage profit for each of the three forward contracts. For each strategy assume that it will cost you $2.5 to execute all the trades (round trip), as your total transaction cost (subtract $2.50 at the end).
A) What is VAT? what is the difference between input and output VAT? B) Samo is a trader who purchases inventory at a cost of 60,500 (inc. VAT) and incurs the expense of 4,000 (Inc. VAT) and sells the inventory for 85,000 (Excl. VAT). Required: (a) If it standard rate is 20%. How will much the trader pay to HMRC or HMRC will pay for him? (b) If it Zero rate (0%). How much the trader will pay for HMRC or HMRC will pay to Samo?
The below call option is European. What is the minimum arbitrage profit at time T=1Y arising from the following prices? So = $19.63 T=1Y K = $18 C = $2.77 r = 6% (cont. comp. annual rate) (required precision 0.01 +/- 0.01)
(1) A trader signs a Forward contract on April 30 for the delivery of 500 gallons of oil on October 31. The risk-free rate is 5.00% on April 30 and the current price of oil is $30 per gallon. Each gallon of storage costs $0.03 per day.a. What will be the fair forward price on April 30?b. If the spot price of oil is $45 per gallon on July 31, what profit or loss would the trader incur if they close out (cash settle) their position?
. GT Bank Ghana Limited quotes JPY/EUR 155-165, and GCB Bank quotes EUR/JPY0.0059-0.0063a. Are these quotes identical? b. If not, is there an opportunity for arbitrage? c. If there is an opportunity for arbitrage, how would one profit from it? 3. Given the bid-ask quotes for jpy/gbp 220-240, at what rate will:(a) Mr. Agbo purchase gbp? (b) Mr. Agbo sell gbp? (c) Mr. Debrah purchase jpy?(d) Mr. Kwaku sell jpy?
The Weiland Computer Corporation is trying to choose between the following mutually exclusive design projects, P1 and P2:Year 0123 Cash flows (P1) -$53,000 27,000 27,000 27,000 Cash flow (P2) -$16,000 9,100 9,100 9,100a. If the discount rate is 10 percent and the company applies the profitability index (PI) decision rule, which project should the firm accept?b. If the firm applies the Net Present Value (NPV) decision rule, which project should it take?c. Are your answers in (a) and (b) different? Explain why?

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