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Find the total yield(%) on the initial investment for the given contract (per 1000 ton contract):   The expiring Coal one-year forward contract future price = $210.00 per ton.   Spot price (at inception) = $200.00.   A margin of 5% of the contract’s face value ($210,000) was deposited in form of a T-bill earning 3% for the year.   a. 5%   b. 98%   c. 95%   d. -2%

Find the total yield(%) on the initial investment for the given contract (per 1000 ton contract):   The expiring Coal one-year forward contract future price = $210.00 per ton.   Spot price (at inception) = $200.00.   A margin of 5% of the contract’s face value ($210,000) was deposited in form of a T-bill earning 3% for the year.   a. 5%   b. 98%   c. 95%   d. -2%

Essentials Of Investments
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
Section: Chapter Questions
Problem 1PS
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Find the total yield(%) on the initial investment for the given contract (per 1000 ton contract):

 

The expiring Coal one-year forward contract future price = $210.00 per ton.

 

Spot price (at inception) = $200.00.

 

A margin of 5% of the contract’s face value ($210,000) was deposited in form of a T-bill earning 3% for the year.

 

a. 5%

 

b. 98%

 

c. 95%

 

d. -2%

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