Today is January 1. The forward price for contracts maturing on April 1 is $104.4 and on October 1 is $111.6. On April 1, the price of a zero-coupon bond maturing on October 1 is $0.975. Assuming that the underlying interest rate is a continuously compounded interest rate and will not change, the amount of profit that you can make on October 1 by trading one contract each of the near and distant maturity forwards and other securities is: [round to two decimal places]
Today is January 1. The forward price for contracts maturing on April 1 is $104.4 and on October 1 is $111.6. On April 1, the price of a zero-coupon bond maturing on October 1 is $0.975. Assuming that the underlying interest rate is a continuously compounded interest rate and will not change, the amount of profit that you can make on October 1 by trading one contract each of the near and distant maturity forwards and other securities is: [round to two 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
Section: Chapter Questions
Problem 1PS
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![Today is January 1. The forward price for contracts maturing on April 1 is $104.4 and on October 1 is $111.6. On
April 1, the price of a zero-coupon bond maturing on October 1 is $0.975. Assuming that the underlying interest
rate is a continuously compounded interest rate and will not change, the amount of profit that you can make on
October 1 by trading one contract each of the near and distant maturity forwards and other securities is: [round to
two decimal places]](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F27484300-95da-42ce-b23a-39f1abbb6553%2F002ef3e5-e54f-4c62-a24d-62217306af4d%2Fp3awdzo_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Today is January 1. The forward price for contracts maturing on April 1 is $104.4 and on October 1 is $111.6. On
April 1, the price of a zero-coupon bond maturing on October 1 is $0.975. Assuming that the underlying interest
rate is a continuously compounded interest rate and will not change, the amount of profit that you can make on
October 1 by trading one contract each of the near and distant maturity forwards and other securities is: [round to
two decimal places]
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