Answer:
$1,193,562
Explanation:
Calculation to Determine the transaction price for this contract.
First step is to calculate the probabilities
Probabilities
August 1, 2021 =70 % *$153,300
August 1, 2021 =$107,310
August 8, 2021= 20%*$51,100
August 8, 2021= $10,220
August 15, 2021 =6%*$102,200
($153,300-$51,100)
August 15, 2021 =$6,132
After August 15, 2021= 4%*$0
After August 15, 2021= $0
Now let calculate the transaction price for this contract.
Total transaction price =$1,069,900+ $107,310+$10,220+$6,132+$0
Total transaction price =$1,193,562
Therefore the transaction price for this contract will be $1,193,562
