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Ber [7]
3 years ago
7

Dudley Savings Bank wishes to take a position in Treasury bond futures contracts, which currently have a quote of 110 − 100. Dud

ley Savings thinks interest rates will go down over the period of investment. The face value of the bond underlying the futures contract is $100,000. a. Should the bank go long or short on the futures contracts? b. Given your answer to part (a), calculate the net profit to Dudley Savings Bank if the price of the futures contracts increases to 110 − 250.
Business
1 answer:
Aneli [31]3 years ago
3 0

Answer:

a. Long

b. $375.00

Explanation:

a. If interest rates decrease over the period of investment, Treasury bond prices will increase. Thus, Dudley Savings Bank should take a long position in the futures contracts on the Treasury bonds. As T-bond prices go up, so will T-bond futures prices.

b. Given a long position:

Net profit = Sale price of futures − Purchase price of futures

= $107,687.50 − $107,312.50 = $375.00

Purchase price of futures = 107 − 100 = 107 10/32% × $100,000 = $107,312.50

Sale price of futures = 107 − 220 = 107 22/32% × $100,000 = $107,687.50

Explanation:

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The highest value of total cost was $ 710 comma 000 in June for Horchata​ Beverages, Inc. Its lowest value of total cost was $ 5
marta [7]

Answer:

A. $ 450 comma 000

Explanation:

In order to compute the fixed cost per month first we have to determine the variable cost per unit which is shown below.

Variable cost per hour = (High total  cost - low total cost) ÷ (High production volume - low production volume)

= ($710,000 - $550,000) ÷ (13,000 units - 5,000 units )

= $160,000 ÷ 8,000 units

= $20

Now the fixed cost equal to

= High total cost - (High production volume × Variable cost per unit)

= $710,000 - (13,000 units × $20)

= $710,000 - $260,000

= $450,000

We simply applied the above formula

6 0
3 years ago
Suppose the exchange rate is 90 yen per U.S. dollar and the United States wants to keep the exchange rate at a target rate of 90
ikadub [295]

Answer:

Option A, buys dollars to raise the exchange rate, is the right answer.

Explanation:

Option A is correct because when the Fed will buy the dollars then only the demand for dollars will shift rightwards. Consequently, the dollar price or exchange rate will go up. Therefore, the Fed will buy the dollars to increase the exchange rate. In another case, if the Fed wants to decrease the exchange rate then it will sell the dollars, and selling of dollars will shift the supply rightwards. Thus, the exchange rate will fall.

6 0
3 years ago
You are planning your retirement in 15 years. You plan to retire with $3,000,000 and your retirement account earns 4.8% compound
Maslowich

Answer:

The retirement fund will last for 33 years and 7 months

Explanation:

We need to solve for time in an ordinary annuity

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C  $15,000.00

rate 0.004 (4.8% divide by 12 month)

PV $3,000,000

time n

15,000 \times \frac{1-(1+0.004)^{-n} }{0.004} = 3,000,000\\

we clear for n as much as we can and solve

(1+0.004)^{-n}= 1-\frac{3,000,000\times0.004}{15,000}

(1+0.004)^{-n}= 0.20

now we use logarithmic properties to solve for n:

-n= \frac{log0.2}{log(1+0.004)

-403.16  

this will be a value in months so we divide by 12 to get it annually

403/12 = 33,5833

we convert the residual to months:

0.5833 x 12 = 6.996 = 7 months

6 0
3 years ago
Given the following data for Vinyard Corporation:
rosijanka [135]

Answer:

C

Explanation:

D / V = 1000 / 4000

Dividing 1000 by 4000 gives 0.25 = 25%

E / V = 3000 / 4000

Dividing 3000 by 4000 gives 0.75 = 75%

7 0
3 years ago
In which situation would you need to compromise to avoid stress and conflict?
Marianna [84]
Add the selections so I can answer.

6 0
4 years ago
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