Futures prices Table 26.4 contains spot and six-month futures prices for several commodities and financial instruments. There may be some money-making opportunities. See if you can find them, and explain how you would trade to take advantage of them. The interest rate is 14.5%, or 7% over the six-month life of the contracts.

  

(Reference Table 26.4)

  

      

 

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Commodity Spot Price Futures Price Comments Magnoosium $2,550 per ton $2,728.50 per ton Monthly storage cost= monthly convenience yield. Frozen quiche $0.50 per pound $0.514 per pound Six months' storage costs= $.10 per pound; six months' convenience yield = $.05 per pound. 4% semiannual coupon payment is due just before futures contract expires. Nevada Hydro 8s of 2002 77 78.39 Costaguanan interest rate is 95% рeгyear 9,300 pulgas = $1 6,900 pulgas = $1 Costaguanan pulgas (currency) $97.54 Establishment pays dividends of $2 per quarter. Next dividend is paid Establishment Industries s05 common stock two months from now. $12,500 per 10,000-gal. tank $14,200 per 10,000-gal. tank Cheap white wine Six months' convenience yield = $250 per tank. Your company has surplus storage and can store 50,000 gallons at no cost. ) TABLE 26.4 Spot and six-month futures prices for selected commodities and securities. See Problem 19. Commodity Spot Price Futures Price Comments Magnoosium $2,550 per ton $2,728.50 per ton Monthly storage cost= monthly convenience yield. Frozen quiche $0.50 per pound $0.514 per pound Six months' storage costs= $.10 per pound; six months' convenience yield = $.05 per pound. 4% semiannual coupon payment is due just before futures contract expires. Nevada Hydro 8s of 2002 77 78.39 Costaguanan interest rate is 95% рeгyear 9,300 pulgas = $1 6,900 pulgas = $1 Costaguanan pulgas (currency) $97.54 Establishment pays dividends of $2 per quarter. Next dividend is paid Establishment Industries s05 common stock two months from now. $12,500 per 10,000-gal. tank $14,200 per 10,000-gal. tank Cheap white wine Six months' convenience yield = $250 per tank. Your company has surplus storage and can store 50,000 gallons at no cost. ) TABLE 26.4 Spot and six-month futures prices for selected commodities and securities. See Problem 19.

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