1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Lelu [443]
1 year ago
9

A 1-year gold futures contract is selling for $1,645. Spot gold prices are $1,592 and the 1-year risk-free rate is 3%. The arbit

rage profit implied by these prices is _____________.
Business
1 answer:
stealth61 [152]1 year ago
5 0

The arbitrage profit implied by these prices is $5.24.

<h3>Arbitrage profit</h3>

Given:

Future contract= 1645

Sport gold price = 1592

Risk-free rate (rf) = .03

Hence:

Arbitrage profit=1645-[1592(1+1.03)¹]

Arbitrage profit=1645- 1639.76

Arbitrage profit=1645 =$5.24

Therefore the arbitrage profit implied by these prices is $5.24.

Learn more about  arbitrage profit here:brainly.com/question/15394730

#SPJ1

You might be interested in
Assume that Amazon has a stock-option plan for top management. Each stock option represents the right to purchase a share of Ama
Kryger [21]

Explanation:

The Journal entry is given below:-

1 January 2020             No Entry

31 December 2020       Compensation Expense Dr,         6,580

                                              To, Paid-In-Capital                         6,580

(Being the compensation expense stock-option plan is recorded)

Working Note:-

Compensation Expense

= $7 × 4,700 ÷ 5

= $7 × 940

= $6,580

7 0
2 years ago
A company has the following account balances: Sales revenue $2,000,000: Sales Returns and Allowances $250,000: Sales Discounts $
Naily [24]

Answer:

0.25 or 25%

Explanation:

The computation of the gross profit rate is shown below:

Gross profit rate = Gross profit ÷ Net sales revenue

where,

Net sales revenue = Sales revenue - Sales Returns and Allowances - Sales Discounts

= $2,000,000 - $250,000 - $50,000

= $1,700,000

And, the Cost of goods sold is $1,275,000

So, the gross profit is

= $1,700,000 - $1,275,000

= $425,000

So, the gross profit rate is

= $425,000 ÷ $1,700,000

= 0.25 or 25%

6 0
3 years ago
A resident of California sells Nevada real estate in an installment sale. In the current year he receives a return of principal
shepuryov [24]

Answer:

The taxable income is $13000

Explanation:

The sell by California resident = $10000

The taxable gains = $2000

Given interest rate = $1000

Since during the year total amount received is the return of principal, gains, and interest rate. Therefore total amount = 10000 + 2000 + 1000 = $13000

Thus, the total amount received during the years is California taxable income.

7 0
2 years ago
F a taxpayer offers you a $20 bill because they were so happy about the quality service they received, what would be the appropr
BlackZzzverrR [31]
The appropriate action would be: C. <span>Thank the taxpayer, and explain that you cannot accept any payment for your services.
Government workers couldn't receive cash payment in any kind unless there is a necessary administrative purpose. 
They could on the other hand, receives Gifts that held the value less than $ 20</span>
6 0
3 years ago
Read 2 more answers
Kirsten believes her company's overhead costs are driven (affected) by the number of direct labor hours because the production p
Vlad1618 [11]

Answer:

Predetermined manufacturing overhead rate= $10 per direct labor hour

Explanation:

Giving the following information:

Product A:

Direct labor hours= 1,600

Product B:

Direct labor hours= 400

Estimated overhead= $20,000

<u>To calculate the predetermined manufacturing overhead rate we need to use the following formula:</u>

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= 20,000/2,000

Predetermined manufacturing overhead rate= $10 per direct labor hour

5 0
3 years ago
Other questions:
  • Salespeople need to possess effective trust-based sales communications skills so that they:
    5·1 answer
  • The following present value factors are provided for use in this problem. Periods Present Value of $1 at 8% Present Value of an
    10·1 answer
  • Vegan delite stock is valued at $68.60 a share. the company pays a constant annual dividend of $2.40 per share. what is the tota
    11·1 answer
  • The bulk of costs related to legal expenses come from: a. Photocopying b. Online research through legal subscription services c.
    5·1 answer
  • During a decline in the economy, a limited number of jobs will motivate a growing number of ______ to start new businesses.
    14·1 answer
  • Dallas Company uses a job order costing system. The company's executives estimated that direct labor would be $3,360,000 (240,00
    15·1 answer
  • A candy company called Hearts Aflame Inc. forms an agreement with
    5·1 answer
  • Suppose a week after you get this report from your research department, you hear on the news that Colombia and Vietnam are going
    7·1 answer
  • A product in the __________ stage of the product life cycle has a high number of competitors and competitive products.
    12·1 answer
  • The present value of cash flow will be greater if we compound less frequently holding the stated interest rate constant. a. true
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!