Consider the commodities and financial assets listed in the following table: Spot Price $2,960 per ton $0.60 per bushel $141.8 Magnoosium Oat bran Asset Biotech stock index Allen Wrench Co. common stock 5-year Treasury note Westonian ruple Magnoosium Oat bran Asset $59.60 $110.53 3.26 ruples = $1 The risk-free interest rate is 7% a year, and the term structure is flat. a. Calculate the six-month futures price for each case. (Do not round intermediate calculations. Round the Westonian ruple valu 3 decimal places and the other answers to 2 decimal places.) Biotech stock index Allen Wrench Co. common stock 5-year Treasury note Westonian ruple Future Price per ton per bushel Comments Net convenience yield 4% per year Net convenience yield = 0.6% per month Dividend = 0 Cash dividend = $4.00 per year ruples/$ 8% coupon 13% interest rate in ruples e. Suppose Allen Wrench stock falls suddenly by $14.00 per share. Investors are confident that the cash dividend will not be redu What happens to the futures price? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Hw.110.

 

Consider the commodities and financial assets listed in the following table:
Spot Price
$2,960 per ton
$0.60 per bushel
$141.8
$59.60
$110.53
3.26 ruples = $1
Magnoosium
Oat bran
Asset
Biotech stock index
Allen Wrench Co. common stock
5-year Treasury note
Westonian ruple
Magnoosium
Oat bran
The risk-free interest rate is 7% a year, and the term structure is flat.
a. Calculate the six-month futures price for each case. (Do not round intermediate calculations. Round the Westonian ruple value to
3 decimal places and the other answers to 2 decimal places.)
Asset
Biotech stock index
Allen Wrench Co. common stock
5-year Treasury note
Westonian ruple
The futures price will
fall
Future Price
to
per ton
per bushel
e. Suppose Allen Wrench stock falls suddenly by $14.00 per share. Investors are confident that the cash dividend will not be reduced.
What happens to the futures price? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Comments
Net convenience yield = 4% per year
Net convenience yield = 0.6% per month
Dividend = 0
Cash dividend $4.00 per year
8% coupon
13% interest rate in ruples
ruples/$
Transcribed Image Text:Consider the commodities and financial assets listed in the following table: Spot Price $2,960 per ton $0.60 per bushel $141.8 $59.60 $110.53 3.26 ruples = $1 Magnoosium Oat bran Asset Biotech stock index Allen Wrench Co. common stock 5-year Treasury note Westonian ruple Magnoosium Oat bran The risk-free interest rate is 7% a year, and the term structure is flat. a. Calculate the six-month futures price for each case. (Do not round intermediate calculations. Round the Westonian ruple value to 3 decimal places and the other answers to 2 decimal places.) Asset Biotech stock index Allen Wrench Co. common stock 5-year Treasury note Westonian ruple The futures price will fall Future Price to per ton per bushel e. Suppose Allen Wrench stock falls suddenly by $14.00 per share. Investors are confident that the cash dividend will not be reduced. What happens to the futures price? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Comments Net convenience yield = 4% per year Net convenience yield = 0.6% per month Dividend = 0 Cash dividend $4.00 per year 8% coupon 13% interest rate in ruples ruples/$
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