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andriy [413]
3 years ago
5

One year ago, you entered into a futures contract to buy 100,000 euros at a futures contract price of $1.22, with a settlement d

ate in one year. Assume that at the contract's maturity the spot rate of the euro is $1.25, Determine the total dollar amount of your profit or loss from speculating with the futures contract.
Business
1 answer:
Law Incorporation [45]3 years ago
8 0

Answer:

Profit of $3000

Explanation:

The exchange rate of a future contract is usually fixed at the time when the contract is buy 100,000 euros at a futures contract price of $1.22.

The Value in dollars at the time is: $122,000

At the maturity spot rate of the euro is $1.25.

The value of the contract is: $125,000

The difference:

$125,000-122,000

=$3000.

Since the maturity spot rate is higher, there is a profit of $3000 from speculating with the futures contract.

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7 0
3 years ago
RAK Co. wants to issue new 20-year bonds for some much-needed expansion projects. The company currently has 5.7 percent coupon b
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Answer:

5.31%

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FV = 1000

Coupon rate = 5.7%

No of compound = 2

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Coupon rate set on new bonds = Rate(Nper, PMT, -PV, FV) * 2

Coupon rate set on new bonds = Rate(40, 28.5, -1048, 1000) * 2

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Coupon rate set on new bonds = 5.31%

7 0
2 years ago
Explain how lowell took advantage of division of labor.
AveGali [126]
Im not sure, sorry, I wish I could help
8 0
3 years ago
On January 1, 2018, the Moody Company entered into a transaction for 100% of the outstanding common stock of Osorio Company. To
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Answer:

$800

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3 0
3 years ago
Which of the following is an essential characteristic of enduringly great companies? They undergo continuous change. They are so
Anit [1.1K]

Answer:

The answer is (A) They undergo continuous change.  

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