The spot price of a widget is $70.00 per unit. Forward prices for 3, 6, 9, and
Question:
The spot price of a widget is $70.00 per unit. Forward prices for 3, 6, 9, and 12 months are $70.70, $71.41, $72.13, and $72.86. Assuming a 5% continuously compounded annual risk-free rate, what are the annualized lease rates for each maturity? Is this an example of contango or backwardation? Explain.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 62% (16 reviews)
The spot price of a widget is 7000 With a continuou...View the full answer
Answered By
Ashington Waweru
I am a lecturer, research writer and also a qualified financial analyst and accountant. I am qualified and articulate in many disciplines including English, Accounting, Finance, Quantitative spreadsheet analysis, Economics, and Statistics. I am an expert with sixteen years of experience in online industry-related work. I have a master's in business administration and a bachelor’s degree in education, accounting, and economics options.
I am a writer and proofreading expert with sixteen years of experience in online writing, proofreading, and text editing. I have vast knowledge and experience in writing techniques and styles such as APA, ASA, MLA, Chicago, Turabian, IEEE, and many others.
I am also an online blogger and research writer with sixteen years of writing and proofreading articles and reports. I have written many scripts and articles for blogs, and I also specialize in search engine
I have sixteen years of experience in Excel data entry, Excel data analysis, R-studio quantitative analysis, SPSS quantitative analysis, research writing, and proofreading articles and reports. I will deliver the highest quality online and offline Excel, R, SPSS, and other spreadsheet solutions within your operational deadlines. I have also compiled many original Excel quantitative and text spreadsheets which solve client’s problems in my research writing career.
I have extensive enterprise resource planning accounting, financial modeling, financial reporting, and company analysis: customer relationship management, enterprise resource planning, financial accounting projects, and corporate finance.
I am articulate in psychology, engineering, nursing, counseling, project management, accounting, finance, quantitative spreadsheet analysis, statistical and economic analysis, among many other industry fields and academic disciplines. I work to solve problems and provide accurate and credible solutions and research reports in all industries in the global economy.
I have taught and conducted masters and Ph.D. thesis research for specialists in Quantitative finance, Financial Accounting, Actuarial science, Macroeconomics, Microeconomics, Risk Management, Managerial Economics, Engineering Economics, Financial economics, Taxation and many other disciplines including water engineering, psychology, e-commerce, mechanical engineering, leadership and many others.
I have developed many courses on online websites like Teachable and Thinkific. I also developed an accounting reporting automation software project for Utafiti sacco located at ILRI Uthiru Kenya when I was working there in year 2001.
I am a mature, self-motivated worker who delivers high-quality, on-time reports which solve client’s problems accurately.
I have written many academic and professional industry research papers and tutored many clients from college to university undergraduate, master's and Ph.D. students, and corporate professionals. I anticipate your hiring me.
I know I will deliver the highest quality work you will find anywhere to award me your project work. Please note that I am looking for a long-term work relationship with you. I look forward to you delivering the best service to you.
3.00+
2+ Reviews
10+ Question Solved
Related Book For
Question Posted:
Students also viewed these Corporate Finance questions
-
The variance of monthly changes in the spot price of live cattle is (in cents per pound) 1.5. The variance of monthly changes in the futures price of live cattle for the April contract is 2. The...
-
The spot price of gold today is $1,505 per ounce, and the futures price for a contract maturing in seven months is $1,548 per ounce. Suppose CAG puts on a futures hedge today and lifts the hedge...
-
The spot price of an index is 1,000 and the risk-free rate is 4%. The prices of three month European call and put options when the strike price is 950 are 78 and 26. Estimate (a) The dividend yield...
-
Q2 You are an electrical inspector to measure the horizontal illuminance over the work plane of a rectangular room. Given : The size of the room is 10 m length x 7 m width. The illuminance grid p =...
-
Using the information provided in P22-13, prepare the cash flow statement and all required disclosures for American Safety Products using the direct method. In P22-13 American Safety Products, Inc....
-
In some countries where there is high inflation, the annual interest rate is more than 50 percent, while in other countries such as the U.S. and many European countries, the annual interest rates are...
-
The manager of Gladstone Ltd is not convinced of the scientific evidence behind climate change, and does not consider it necessary to adopt changes in the companys operations which would decrease its...
-
The project manager for the project in Problem 1 has estimated the probabilities of not detecting the risks in time to react to them as follows, again on a seven-point scale: Threat 1: 4, Threat 2:...
-
31 (i) Explain why the refractive index of any material with respect to air is always greater 1. (ii) In the figure below a light ray travels from air into the semi-circular plastic block. Give a...
-
A thin, uniform ring of mass m and radius R is attached by a frictionless pin to a collar at A and rests against a small roller at B. The ring lies in a vertical plane, and the collar can move freely...
-
Suppose that 10 years from now it becomes possible for money managers to engage in time travel. In particular, suppose that a money manager could travel to January 1981, when the 1-year Treasury bill...
-
Using Table 6.6, what is your best guess about the current price of gold per ounce? Explain with detail.
-
What makes mullions and buckle folds similar?
-
You are the investment manager of an investment fund. You are now considering new investment in common stock of Company A and Company B. The rate of returns of stock A and B have the following...
-
Project preparation phases 1. Did the challenge of fuzzy front end" impact this project? If yes, explain the type of degree of impact, if no, explain why no. 2. Should the organization's project...
-
Compose Java program to track down the factorial of number. Input number ought to be given by client. ) Compose Java program to peruse a record content line by line. Straightforward normal language...
-
I choose IKEA COMPANY Production possibility curve (PPC) Scenario1: a. If your company can make two goods, use a numerical table and list different combinations of two goods your company can make b....
-
How can businesses effectively manage and mitigate the risks associated with supply chain disruptions?
-
Those who criticized Coco Chanels later clothing designs misjudged as _______ the style that generations of women to come would regard as the epitome of high fashion. a. Defamatory b. Prohibitive c....
-
A seasonal index may be less than one, equal to one, or greater than one. Explain what each of these values would mean.
-
Explain how to synthetically create the equity-linked CD in Section 15.3 by using a forward contract on the S&P index and a put option instead of a call option. Discuss.
-
Consider the equity-linked CD in Section 15.3. Assuming that profit for the issuing bank is zero, draw a graph showing how the participation rate, , varies with the coupon, c. Repeat assuming the...
-
Compute the required semiannual cash dividend if the expiration payoff to the CD is $1300 max(0, 1300 S5.5) and the initial price is to be $1300.
-
Randy Sneaker Company is a maker of mid-priced sneakers. They have recently made a new running sneaker but it has not met its sales expectations. As a result, the company president has asked you to...
-
a. Factorize the following expression 6x+13x-5 b. Express 20% as a decimal number c. Simplify (3y+5) (2y-3) - (y+7)(5y - 1). d. Simplify 7x+x-x-5x-3x-6x4 e. Solve -3x+4 <11 hence represent it...
-
Q4(a) Personal protective equipment (PPE) refers to the equipment worn to minimize the worker's exposure to the hazards which causes occupational injuries and illness. Explain three (3) factors which...
Study smarter with the SolutionInn App