Question: with solutions A SHORT forward contract has been entered (issued) some time ago by investor with a delivery price of 200 USD on a single

with solutions A SHORT forward contract has been entered (issued) some time with solutions

A SHORT forward contract has been entered (issued) some time ago by investor with a delivery price of 200 USD on a single underlying asset. Asset does not generate any income nor costs. It currently has 9M till delivery date of single asset. The current zero 9M rate is 6% pa. (annual compounding). Also the current spot price (on which market based new theoretical forward contract prices) is 190 USD. What is the current value of contract for investor? a. -1,44790 O b. None fot he answers provided. O c. -9,57239 O d. 18,12450 O e. -18,12450 Of. 1,44790 O g. 9,57239

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

On December 31, 2018, Tsang Group borrowed HK$3,000,000 at 12% payable annually to finance the construction of a new building. In 2019, the company made the following expenditures related to this...

A SHORT forward contract has been entered some time ago with a delivery price of 200 USD on a single underlying asset Asset does not generate any income nor costs. It currently has 9M till delivery...

Investor considers entering a short position in a 3-year forward contract for a delivery of 100 units of bitcoins which spot price is USD 40 000 per bitcoin. Each bitcoin requires USD 200 storage...

Question 4 Not yet answered Investor considers entering a short position in a 3-year forward contract for a delivery of 100 units of bitcoins which spot price is USD 40 000 per bitcoin. Each bitcoin...

Investor considers entering a short position in a 3-year forward contract for a delivery of 100 units of bitcoins which spot price is USD 40 000 per bitcoin. Each bitcoin requires USD 200 storage...

Which of the following is true of LIBOR The LIBOR rate is free of credit risk A LIBOR rate is lower than the Treasury rate when the two have the same maturity It is a rate used when borrowing and...

Can someone help me to do the sample exam? urgent thank you Student Name ________________________ Student Number ________________________ Bus 316 Final Exam, December 2011 CAUTION In accordance with...

I hope someone can help me finish those qusetions as soon as possible. Thank you Student Name ________________________ Student Number ________________________ Bus 316 Final Exam, December 2011...

the green line is a question. thank you Consider a standard binomial model of a risky asset where there are two states of nature, the UP state and the DOWN state. The former is denoted by U and the...

1. Suppose an investor entered into a long forward contract and also entered into a long futures contract. Which statement is true? Both the delivery price of the forward contract and the futures...

How many cookies in a batch of 100 should the manager expect to discard if company policy requires that all chocolate-chip cookies sold have at least four chocolate-chip parts? For Information: Refer...

Determine the VC and IB for the network of Fig. 4.135. 22 V 2.2 k 82 k = 220 16 k 0.75 k

11. Defi ne the following terms: argument from example explanation conditional statement explanandum antecedent explanans consequent illustration suffi cient condition expository passage necessary...

Carmen had worked for Sparrow Corporation for 30 years when she died of a heart attack at age 60. She was practically penniless at the time of her death, owed a $12,000 hospital bill, and had a...