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Lubov Fominskaja [6]
3 years ago
8

A futures contract on a 30 day Eurodollar time deposit is currently selling at an IMM index of 95.75 percent. The IMM index on a

30 day Eurodollar time deposit for immediate delivery is 95.10 percent. What is the basis risk for the futures contract
Business
1 answer:
kolezko [41]3 years ago
5 0

Answer:

Basis risk for the future contract is 0.65%

Explanation:

Basis risk is the difference in spot price and future price of an hedged asset. It is the difference between the price price of an hedged asset and price of the asset serving as the hedge.

Basis risk = Futures price of contract − Spot price of hedged asset

Basis Risk = Future IMM index - Spot IMM index

Basis risk = 95.75% - 95.10%

Basis risk = 0.65%

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"The function C(t)=C(1+r)t models the rise in the cost of a product that has a cost of C today, subject to an average yearly inf
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Answer:

$351,912.61

Explanation:

Data provided in the question:

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3 years ago
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zhannawk [14.2K]

Answer:

The controllable variance for the month was $1,709 unfavorable

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Controllable variance = $11,227 - $12,936 = $1,709 unfavorable

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