June 2019 Mexican peso futures contract has a price of $0.05197 per MXN. You believe the spot price in June will be 0.05831 per MXN a. What speculative position would you enter into to attempt to profit from your beliefs? O Short position O Long Position b. Calculate your anticipated profits, assuming you take a position in three contracts. (Do not round intermediate calculations. Round your answer to the nearest whole number.) Anticipated profit c. What is the size of your profit (loss) if the futures price is indeed an unbiased predictor of the future spot price and this price materializes? (A Negative value should be indicated with a minus sign. Do not round intermediate calculations. Round your answer to the nearest whole number)
Q: Assume a homeowner currently has 95% of its original mortgage balance outstanding? If he made no…
A: The single monthly mortality (SMM) rate represents the fraction of the outstanding mortgage balance…
Q: the real rate of interest is 4.00% and the inflation rate is 4.00%. What is the value today of…
A: Real interest rate is the interest rate after deduction of inflation from the nominal rate of return…
Q: Carol plans to invest in a 12 year bond issued by Iris Ltd that pays a coupon of 4.8 percent. Coupon…
A: The maximum amount that can be paid for the bond is the present value of all future bond payments…
Q: Lucid Choice is a UK company specialising in producing and retailing health foods, dietary…
A: Lucid Choice's commitment to developing sustainability-related Key Performance Indicators (KPIs)…
Q: The British government has a consol bond outstanding that pays ₤100 in interest each year. Assuming…
A: According to the given information,current yield = 5%annual interest payment = £100We know that the…
Q: 1. A natural gas upstream company acquires a license for an onshore block and estimates that…
A: The given details are:Cost of drilling; $250 millionNPV of success: $1 billionProbability of…
Q: The house price is $700 thousand. You will fund $100 thousand of this upfront, and fund the…
A: The price of house = $700,000. DownPayment =$100,000 Mortgage loan Tenure = 30 year The mortgage…
Q: T & H Research borrowed $25,000 on Mar. 8, signing a note due in 60 days at a rate of 8%. On Apr. 20…
A: The amount received at the end of the investment horizon is known as the maturity value. The total…
Q: Ife deposits $200 in an account paying a nominal interest rate 9.800% compounded quarterly. Muhammad…
A: The FV of an investment refers to the combined value of the investment's cash flows at a particular…
Q: ear: 1 2 3 4 5 Cash Flow: $21,000 $22,000 $23,000 $24,000 $25,000 after the 5th year, cash flows are…
A: Value of the property is based on amount of income from the property and it is the present value of…
Q: explain the application of annuities with discount rates (usinf formulas)
A: Annuities are a series of equal payments made at regular intervals. The concept of discounting…
Q: 12. A FI that has assets of $1 million whose duration has been estimated at 9.9 years. It has…
A: Leverage-adjusted duration gap is a measure used to calculate the sensitivity of the financial…
Q: A company puts together a set of cash flow projections and calculates an IRR of 25% for the project.…
A: IRR refers to the internal rate of return, it is the percentage of gain or profits generated by the…
Q: Cement Corporation has taken a one-year loan with a face value of $500,000 and a coupon rate of 18%.…
A: Duration of the bond is the period required to receive weighted cash flow from the security and it…
Q: Given the last year's dividend is 9.80, speed of adjustment: = 45%, target payout ratio 60% and EPS…
A: Linter's Model, also known as Linter's Dividend Adjustment Model, is a financial model used to…
Q: The Stancil Corporation provided the following current information: Proceeds from long-term…
A: The cash flows from the firm =-Purchases of fixed assets- Purchases of inventoriesCash flows to…
Q: consider the following information, what is the NPV if the borrower refinances the loan? expected…
A: Net Present Value (NPV) is a financial concept used to evaluate the profitability of an investment…
Q: Dunbar Corporation can purchase an asset for $35,000; the asset will be worthless after 12 years.…
A: To calculate the net advantage to leasing, need to compare the present value of costs associated…
Q: If you borrow $9000 at an annual percentage rate (APR) of r (as a decimal) from a bank, and if you…
A: The term "loan" refers to the giving of property or other tangible items to another party in…
Q: An apartment property that will be held for 10 years has the following forecasted cash flows before…
A: The maximum value of the initial investment likely to be paid by an investor will be the present…
Q: annual sales of $6,000,000. Ninety percent are on credit. The firm has $630,000 in accounts…
A: Annual sales = $6,000,000Accounts receivable are $630,000Assume, there are 369 days in a yearCredit…
Q: A company will need $50,000 in 8 years for a new addition. To meet this goal, the company deposits…
A: The present value of a future amount can be calculated using the formula,
Q: Return on Common Stock You buy a share of The Ludwig Corporation stock for $18.50. You expect it…
A: The growth rate in dividend is calculated using following compounded average growth rate…
Q: Suppose an SEVP tells you that last year a bank had total interest expenses on all borrowings of BDT…
A: The given details are:Interest expense= BDT 12 millionNon-interest expense= BDT 5 millionInterest…
Q: (b) Mr Jamal Abdollah plan to buy either one of this two bonds below. The information for both bonds…
A: The value of the bond is the present value of all the coupon payments and the par value discounted…
Q: Your credit card has a balance of $4500 and an interest rate of 22%. The credit card requires a…
A: Credit cards refer to debt instruments that are provided by financial institutions to individuals…
Q: With an annual inflation rate of 2.39%, how much did an item that now costs $5800 cost 9 years…
A: Future value is computed by following formula:-FV = PV * (1+r)nwhereFV = future valuePV = present…
Q: If call options on USD with a strike price of AUD1.2604/USD have a premium of AUD0.0283, what is the…
A: The moment at which a business generates as much money as it is spending is known as the break-even…
Q: correct answers are i) 20.55, ii) d=5.81% and iii) d^12= 5.97% No tables, only formulas, please A…
A: Simple interest is a method in which the interest earned on the principal does not earn interest…
Q: Ilana Industries, Inc., needs a new lathe. It can buy a new high-speed lathe for $1.4 million. The…
A: The worth of all future cash flows, both positive and negative, discounted to the present, during…
Q: Make an evaluation of this.
A: We first need to compute the expected profit under each scenario using the formula below:Then we…
Q: What make ROE(return on equity) of a company decrease further into negatives even though their…
A: Return on Equity (ROE) is a financial metric that gives investors an idea of how well a company is…
Q: The D.J. Brothers Corporation needs to raise Ks. store. Brothers buys from its suppliers on terms of…
A: Companies give trade discounts to customers to pay early because the companies can use money…
Q: explain the application of compounding measures: effective or nominal / interest or discount rates,…
A: The sum that the lender demands from the borrower in addition to the principal amount is known as…
Q: Supercool Inc is currently an unlevered firm with 1,000 shares outstanding. It expects to generate…
A: Earning per share is a kind of ratio that is used to determine the company's profitability.…
Q: Jason is considering engaging in part-time work as an Uber driver, but he requires an initial…
A: We will use capital budgeting functions in excel here to get the values of NPV and IRR. NPV means…
Q: Your boss, whose background is in financial planning, is concerned about the company’s high weighted…
A: Weighted average cost of capital=16%cost of equity=6%Cost of debt=26%Required:Debt-Equity Mix=?
Q: xplain the differences between an ‘efficient portfolio’ and an ‘efficient market'
A: Efficiency in financeThe concept of efficiency in finance examines how resources, whether in the…
Q: During 2021, Raines Umbrella Corporation had sales of $860,000. Cost of goods sold, administrative…
A: Net Income = Sales - Cost of goods sold - administrative and selling expenses - depreciation…
Q: You put on a $50 - $60 1 x 2 call back spread with the underlying at $50. Describe your position…
A: The options strategy you have employed is known as a "1 x 2 call back spread." This strategy…
Q: Jane Evans receives payments of $900 at the beginning of each month from a earned by the fund is…
A: Pension fund provides the pension for retirement based on the fund available interest rate and time…
Q: Louie is an ASSCAT student who desires to establish a long-term fund with P200, 000 that his…
A: The management fees are the fees charged by the fund manager/Fund as a percentage of the fund value…
Q: Calculate unlevered beta
A: Unlevered beta, also known as asset beta or equity beta, is a financial metric used in the field of…
Q: Consider an investment whose annual return is normally distributed with a mean of 6% and a standard…
A: A typical risk management metric in the banking sector is value at risk, or VAR. Value at Risk is a…
Q: ou are considering two different methods of constructing a new warehouse. The first method uses…
A: Annuity is a series of equal periodic payments.With periodic interest rate (r), period (n) and…
Q: One-year zero coupon Treasury strips with a face value of $1000 are currently selling for 956 30/32.…
A: The given details related to a put option on a stock are given as follows:Required:a) Find the cost…
Q: The primary goal of corporations The owners of a corporation are the shareholders of the company.…
A: Variables in the question:No. of shares bought=175Current share price=$32.50
Q: ABC bonds have a par value of $1,000. The bonds pay $30 in interest every six months and will mature…
A: Price of a bond is the present value of coupon payments plus the present value of the par value of…
Q: Does decreasing net margin percentages and slightly increasing financial leverage have an effect on…
A: The Return on Equity is important matrix for understanding variable that affect the profit .From DU…
Q: Consider a one period binomial model of a currency option on the dollar. The current (date t = 0)…
A: To determine the price of the call option, we need to form a replicating portfolio using the forward…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 1 images
- June 2021 Mexican peso futures contract has a price of $0.05194 per MXN. You believe the spot price in June will be $0.04525 per MXN. Required: a. What speculative position would you enter into to attempt to profit from your beliefs? b. Calculate your anticipated profits, assuming you take a position in three contracts. c. What is the size of your profit (loss) if the futures price is indeed an unbiased predictor of the future spot price and this price materializes? Complete this question by entering your answers in the tabs below. Required A Required B Required C Calculate your anticipated profits, assuming you take a position in three contracts. Note: Do not round intermediate calculations. Round your answer to the nearest whole number. Anticipated profitSuppose you work as a broker in an investment company, and there is an expectation that the market interest rate will be 0.031. based on this expectation you are required to calculate the market price for the following CD; Issue date: 1 January 2021 Maturity date:10 May 2021. The face value OMR 10000. Interest on CD: 5 percent.The Mexican peso futures contract is trading at 0.07713 $/MXN. Contract size for the Mexican peso future is 500,000 pesos. You believe the spot price will be 0.08365 $/MXN at expiration. What speculative position would you enter into to profit from your beliefs? Calculate your anticipated profits assuming you take a position in three contracts. What is the size of your profit or loss if the futures price is indeed an unbiased predictor of the future spot price and this price materializes? Do problem 1 again assuming you believe the spot price will be 0.07061 $/MXN.
- Consider a hypothetical futures contract where the current price is $ 212. The initial margin requirement is $ 10 and the maintenance margin requirement is $ 8. You enter into long 20 contracts and meet all margin requirements, but do not withdraw any excess margin. B. Complete the table below and explain all deposited funds. Suppose the contract was purchased at the settlement price of that day, so there is no gain or loss at current market prices on the day of purchase. C. What is your total profit or loss by the end of Day 6?Suppose you sell six September 2020 palladium futures contracts this day at the last price of the day. Use Table 23.1. a. What will your profit or loss be if palladium prices turn out to be $2,034.50 per ounce at expiration? (Do not round intermediate calculations and enter your answer as a positive value rounded to 2 decimal places, e.g., 32.16.) b. What will your profit or loss be if palladium prices are $1,977.50 per ounce at expiration? (Do not round intermediate calculations and enter your answer as a positive value rounded to the nearest whole number, e.g., 32.) a. Loss b. Profit Answer is not complete. 6,200Suppose you work as a broker in an investment company, and there is an expectation that the market interest rate will be 0.029. based on this expectation you are required to calculate the market price for the following CD;Issue date: 1 January 2021 Maturity date:10 May 2021. The face value OMR 10000. Interest on CD: 5 percent. Select one: a. 15942.02 b. 15574.10 c. 15677.97 d. All the given choices are not correct e. 15572.50
- Look at the futures listings for the corn contract in Table 2.7 Suppose you buy one contract for March 2020 delivery. If the contract closes in March at a level of 4.27, what will your profit be? (Round your answer to 2 decimal places.) ProfitRefer to the Mini-S&P contract in Figure 22.1. Assume the closing price for this day.a. If the margin requirement is 23% of the futures price times the contract multiplier of $50, how much must you deposit with your broker to trade the March maturity contract? (Round your answer to the nearest whole dollar.)Required margin depositb. If the March futures price increases to 2594.70, what percentage return will you earn on your investment if you entered the long side of the contract at the price shown in the figure? (Do not round intermediate calculations. Round your answer to 2 decimal places.)Percentage return on net investment%c. If the March futures price falls by 1%, what is your percentage return? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.)Percentage return on net investment%A trader takes a view that March KLSE CI futures which are currently trading at 1188.60 are about to enter a downtrend. Should the trader go long or short futures. Assuming the trader maintains their original position until expiry and the cash settlement price is 1185.40, what will be the profit or loss? The contract size is RM50 per contract.
- Futures Contracts | WSJ.com/commodities Metal & Petroleum Futures Contract Open High hi lo low Copper-High (CMX)-25,000 lbs.; $ per lb. Contract Open Open High hi lo low Settle Chg interest Open Coffee (ICE-US)-37,500 lbs.; cents per lb. Settle Chg interest Dec 194.00 205.55 192.95 204.05 10.05 129,6% March 22 196.95 208.35 195.80 206.90 10.10 70,796 Sugar-World (ICE-US)-112,000 lbs.; cents per lb. Oct 4.1500 4.2030 4.1500 Dec 4.1065 4.2030 4.0585 4.1885 40.1935 0.1035 0.0995 2,734 109,717 March 20.31 20.35 20.02 20.06 -.28 420,744 May 19.72 19.75 19.48 19.53 .23 156,809 Oct Gold (CMX)-100 troy oz.; $ per troy oz. 1754.30 1762.60 1748.50 Sugar-Domestic (ICE-US)-112,000 lbs.; cents per lb. 1757.00 1.70 Nov 1755.90 1764.30 1750.00 1757.70 1.40 4,163 1,093 Nov 37.00 37.01 37.00 37.00 -.05 1,265 March'22 36.00 36.01 36.00 36.00 -.10 2,819 Dec 1757.20 1765.20 1749.90 1758.40 1.40 407,321 Feb 22 1759.10 1766.40 1751.60 1760.10 1.60 46,135 Cotton (ICE-US)-50,000 lbs.; cents per lb. Oct Oct…Suppose the September Eurodollar futures contract has a price of 96.4. You plan to borrow $50m for 3 months in September at LIBOR, and you intend to use the Eurodollar contract to hedge your borrowing rate. a. What rate can you secure? b. Will you be long or short the Eurodollar contract? c. How many contracts will you enter into? d. Assuming the true 3-month LIBOR is 1% in September, what is the settlement in dollars at expiration of the futures contract? (For purposes of this question, ignore daily marking-to-market on the futures contract.)If the initial speculative margin of a futures contract is $2,000, the maintenance margin is $1,800 and your trading account balance has increased to $2,300, how much must you deposit to comply with your margin requirement?