Assume that the interest rate r = 4% (continuously compounded) is con- stant. If today's stock...
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Assume that the interest rate r = 4% (continuously compounded) is con- stant. If today's stock price is £9.14, what will be tomorrow's stock price such that the marking-to-market for a long position in futures with deliv- ery in 3 months is £0.54? State any formulae used. (15 marks) Assume that the interest rate r = 4% (continuously compounded) is con- stant. If today's stock price is £9.14, what will be tomorrow's stock price such that the marking-to-market for a long position in futures with deliv- ery in 3 months is £0.54? State any formulae used. (15 marks)
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Answer rating: 100% (QA)
Step 1 Use the formula for the present value of a future sum PV FV1rn where FV is the future value r is the interest rate and n is the number of time ... View the full answer
Related Book For
Introduction to Financial Accounting
ISBN: 978-0133251036
11th edition
Authors: Charles Horngren, Gary Sundem, John Elliott, Donna Philbrick
Posted Date:
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