FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Consider a forward contract on NVIDIA Corporation stock. This contract is a long forward contract with a remaining maturity of 5 months. The current price

Consider a forward contract on NVIDIA Corporation stock. This contract is a long forward contract with a remaining maturity of 5 months. The current price of NVIDIA is $95, the risk-free rate of interest is 5% per year (with continuous compounding), and the delivery price is $90. 

What is the current value of this long-forward contract?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

The formula to calculate the current value of a long forward cont... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Smith and Roberson Business Law

Smith and Roberson Business Law

Authors: Richard A. Mann, Barry S. Roberts

15th Edition

1285141903, 1285141903, 9781285141909, 978-0538473637

More Books

Students also viewed these Finance questions

Question

are defined as messages that are fair responses by businesses to legitimate requests in claim messages by customers. O a. Procedural messages O b. Acknowledgement messages O c. Adjustment messages...

Answered: 1 week ago

Question

★★★★★
7.1. Using risk-neutral valuation, derive a formula for a derivative that pays cash flows over the next two periods. Assume the risk-free rate is 4 percent per period. The underlying asset, which...

Answered: 1 week ago

Question

★★★★★
You have $13,000 in your account that you want to grow to triple that amount in 35 years. What annual rate of return is necessary to reach your goal? (Note: Enter your answer is a decimal, not a...

Answered: 1 week ago

Question

★★★★★
What is the result of executing the following method? A. The declaration of name does not compile. B. The declaration of _number does not compile. C. The declaration of profit$$$ does not compile. D....

Answered: 1 week ago

Question

★★★★★
In Figure, a uniform electric field E collapses. The vertical axis scale is set by E s = 6.0 x 103N/C, and the horizontal axis scale is set by E s = 12.0s. Calculate the magnitude of the displacement...

Answered: 1 week ago

Question

★★★★★
Similarly, if Cameron Company made an advance payment of $3,000 to its landlord on January 31 for two months rent, its asset account P _____ Rent would have a balance of $ on January 31, a balance of...

Answered: 1 week ago

Question

★★★★★
=+a) Find the EV for his actions.

Answered: 1 week ago

Question

★★★★★
Creating a Partnership Tax Return Overview You are a senior tax accountant in the firm, Ernest & Rainhouse. Joe, a new junior accountant, has just completed an interview with a new client Harry,...

Answered: 1 week ago

Question

★★★★★
If the FOMC directs the Federal Reserve trading desk to loosen credit, which of the following will happen? ) Bo The trading desk will engage in repurchase agreements with banks and cash reserves will...

Answered: 1 week ago

Question

★★★★★
A centrifugal pump delivers water through a 40-cm-diameter, 1,000-m-long commercial steel pipe from reservoir A to B with EA = 920.5 m and 8 = 935.5 m. Friction losses vary according to the Moody...

Answered: 1 week ago

Question

★★★★★
needs the answer. (1) Use the 7 samples to estimate the simple covariance matrix V as follows. Let := (1/7) ) . 2 :0 0 -1, 1= 1,....T, and V := T Plot the eigenvalues both of the true covariance...

Answered: 1 week ago

Question

★★★★★
001 (part 1 of 3) 10.0 points The scale on the horizontal axis is 3 s per divi- sion and on the vertical axis 3 m per division. 5 position (x 3 m) 0 1 23 4 5 6 7 time (x 3 s) What is the time...

Answered: 1 week ago

Question

★★★★★
Sandeep Parikh purchased a variable life ( VL ) insurance policy from the Homerun Insurance Company. Assuming Mr . Parikh's policy is a typical VL policy, it is correct to say that the subaccount...

Answered: 1 week ago

Question

★★★★★
Calculate mean, median, standard deviation, minimum, maximum, and counts (n) for all variables in the POS Associates data set that are appropriate (i.e., that are quantitative variables or are...

Answered: 1 week ago

Question

★★★★★
Demetri lives in the city and sometimes uses a ride share service. A ride costs $1.50 for the first mile and $0.25 for each additional mile. Demetri does not want to spend more than $3.75 on a ride....

Answered: 1 week ago

Question

★★★★★
Required information Exercise 12-12 (Algo) Indirect: Preparing statement of cash flows LO P2, P3, A1 [The following information applies to the questions displayed below.] The following financial...

Answered: 1 week ago

Question

★★★★★
Discuss the essential temporary accounts that a corporation will need to close during this process. Describe some issues that may arise if a corporation were to miss closing some accounts or skip the...

Answered: 1 week ago

Question

★★★★★
Assessing simultaneous changes in CVP relationships Braun Corporation sells hammocks; variable costs are $75 each, and the hammocks are sold for $125 each. Braun incurs $240,000 of fixed operating...

Answered: 1 week ago

Question

★★★★★
Discuss the methods by which liability on an instrument may be terminated.

Answered: 1 week ago

Question

★★★★★
At the time of his marriage to Ann, Robert owned several parcels of real estate in joint tenancy with his brother, Sam. During his marriage, Robert purchased a house and put the title in his name and...

Answered: 1 week ago

Question

★★★★★
Rich, a club member, left his golf clubs with Bogan, the pro at the Happy Hours Country Club, to be refinished at Bogans pro shop. The refinisher employed by Bogan suddenly left town, taking Richs...

Answered: 1 week ago

Question

★★★★★
In the following probability distribution, the random variable X represents the number of marriages an individual aged 15 years or older has been involved in. x P(x) 0........................0.272...

Answered: 1 week ago

Question

★★★★★
The negative binomial probability distribution can be used to compute the probability of the random variable X, the number of trials necessary to observe r successes of a binomial experiment. The...

Answered: 1 week ago

Question

★★★★★
In the Healthy Handwashing Survey conducted by Bradley Corporation, it was found that 64% of adult Americans operate the flusher of toilets in public restrooms with their foot. (a) If 500 adult...

Answered: 1 week ago

Previous Question Next Question