Suppose a farmer is expecting that her crop of oranges will be ready for harvest and sale as 150,000 pounds of orange juice in 3 months time. Suppose each orange juice futures contract is  for 15,000 pounds of orange juice, and the current futures price is F0 = 118.65 cents-per-pound. Assuming that the farmer has enough cash liquidity to fund any margin calls, what is the risk-free price that she can guarantee herself?

Q: What is the required annual rate of return on the cocoa contract ? You plan to hold the contract for…

A: Solution:- Given in Question- Risk Free Return = 4% Risk Premium = 6% Beta = -0.291 A. To Calculate…

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A: Current price = p = $432 Risk free rate = r = 2.8% Time = t = 8 / 12 year

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A: Information Provided: Annuity amount = $1.4 million per year Interest rate = 8%

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Q: Marry plans to buy a house with a value of 230,000 She has a 20% down payment and 80% as a 30-years…

A: Using  M =  P [r(1+r)^n]/[(1+r)^n-1] P = Principal = 230000* 0.80 = 184000 r = monthly interest rate…

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A: A.Five Year Zero Coupon Bond= $12 million Twenty Year Zero Coupon Bond= $8 million B.Fave Value of…

Q: 9)

A: Thus, deduced (practical fit) closely: Net convenience field: $3.39 per bushel

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Q: Suppose your company needs to make a payment of 50 million Swiss franc one year from now, how would…

A: Payment obligation = 50 million Swiss franc Futures contract = 125,000 Swiss franc.

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Q: Suppose for simplicity that the price of frozen concentrated orange juice is currently at $1000 per…

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Q: Consider a one-period binomial model in which the underlying is at 65 Euros, and can go up 30% or…

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Q: futures price is $820 per ounce. How many contracts do you need to purchase? How much will you pay…

A: Given that,To find the different entities using the given information.

Q: l. The one year risk-free rate is 6% per annum. The futures price for delivery of one bushel of corn…

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Q: Consider a farmer who plans to sell 6,000 bushels of corns on date T. The date-T spot price of corn…

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