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
uranmaximum [27]
3 years ago
11

A single-stock futures contract on a non-dividend-paying stock with current price $250 has a maturity of 1 year. If the T-bill r

ate is 4%. What should the futures price be if the maturity of the contract is 2 years?
Business
1 answer:
Nuetrik [128]3 years ago
4 0

Answer:

$270.4

Explanation:

Calculation for What should the futures price be if the maturity of the contract is 2 years

Using this formula

Future Price= Stock Price ×(1 + Risk Free rate)^Maturity years

Let plug in the formula

Future Price=$250×(1+4%)^2

Future Price=$250×(1+0.04)^2

Future Price$250×(1.04)^2

Future Price=$250×1.0816

Future Price=$270.4

Therefore What should the futures price be if the maturity of the contract is 2 years will be $270.4

You might be interested in
Which of the following describes the substitution effect of a price change?A) The change in demand that results from a change in
Liula [17]

Answer:

The answer is D. The change in quantity demanded of a good that results from a change in price, making the good more or less expensive relative to other goods, holding constant the effect of the price change on consumer purchasing power

Explanation:

Substitution effect is a concept in which, as the price of a good or service increases, less of the good or service is substituted for other less expensive.

For example, if the price of Pepsi were to rise, the substitution effect would cause the consumer to buy less of it and substitute more coca-cola for now relatively more expensive Pepsi.

Option A. is wrong because we are talking about the quantity demanded and not just demand. (Please take note).

6 0
3 years ago
Abbott Company uses the allowance method of accounting for uncollectible accounts. Abbott estimates that 3% of net credit sales
mixer [17]

Answer:

b. $3,000

Explanation:

According to the above information, the following data are given

Credit sales = $100,000

Uncollectible percentage = 3%

So, after the adjustment by using allowance method, Bad debt expense can be calculated as;

Bad debt expense = Credit sales × Uncollectible percentage

= $100,000 × 3%

= $3,000

3 0
3 years ago
The role of a campaign manager is to
Westkost [7]

The role of campaign manager is to oversee a campaign organization. He is responsible for coordinating the operations and activities of the campaign on day to day basis, and the activities that indirectly or directly support the campaign. He manages the activities and makes the campaign effective. His responsibilities include management of staff, coordination with the candidates, looking after campaign budget.

5 0
2 years ago
Read 2 more answers
Karlie wants to be an anthropologist. What is the academic requirement for this job?
Harlamova29_29 [7]
There are a couple of academic requirements for an anthropologist job. If Karlie wants to be start at an entry level anthropologist job she will need a bachelor's degree. If Karlie wants to start at an advanced level, she will need a doctoral or master's degree. 
8 0
3 years ago
The scientific method begins with
Zina [86]

C, The identification of a problem for investigation

7 0
3 years ago
Other questions:
  • A job shadow takes place:
    11·2 answers
  • Explain the difference between at least four different post-secondary options, and provide an example of one possible career cho
    5·1 answer
  • Leaders with a large span of control tend to display more consideration and use more personal approaches when influencing follow
    14·1 answer
  • The recapture of depreciation changes the character of the gain on a Section 1231 asset from a(n) _________ gain to ________ inc
    6·1 answer
  • Marshmellow Corporation sells a product for $140 per unit. The product's current sales are 12,500 units and its break-even sales
    8·1 answer
  • Promotion tends to a. overemphasize physiological and safety needs. b. capitalize on existing needs. c. avoid focusing on people
    6·1 answer
  • Activity-Based Costing for a Service Business Sterling Hotel uses activity-based costing to determine the cost of servicing cust
    10·1 answer
  • Jay P Horgan Bank holds deposits of $700 million. The current market value of the bank's loans is $500 million. It also holds re
    6·1 answer
  • Hello can someone help me with this because i'm confused about it
    5·2 answers
  • everyday, pepsi products are delivered to grocery stores, gas stations, vending machines, and restaurants in the united states a
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!