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(Pricing a forward contract with dividends)
The current price of silver is $206 per ounce. The storage cost is $1 ounce per year, payable quarterly in advance. Assuming a constant annual interest rate of 9% compounded quarterly, what is the theoretical forward price of silver for delivery in 9 months?
Please submit your answer rounded to the nearest integer - for example, if your answer is 19.819.8, round it to either 2020.
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- A payment stream consists of a payment of $1600 today, a payment of $2400 in 3 months, and a payment of $2600 in 21 months. What is the fair market value of this payment stream 18 months from today? Assume a compound interest rate of 6.5% compounded quarterly. Today + $1600 FV1 = $ PV3 = $ Start by calculating the following values on the time diagram: FV2 = $ 3 Months The fair market value of this payment stream is: Total = $ Time Value of Money Solver $2400 Enter the given values. 0 N: = 0 Number of Payment Periods 1:% = 0 Annual Interest Rate as a Percent PV: = Present Value PMT: = 0 Payment FV: = Future Value P/Y: 0 12 V Payments per Year C/Y: 12 V Compounding Periods per Year PMT: = END € Solve Solve Solve Solve 18 Months Solve FV2 FV1 + PV3 Total 21 Months $2600Question: (Pricing a forward contract with dividends) The current price of silver is $206 per ounce. The storage cost is $1 ounce per year, payable quarterly in advance. Assuming a constant annual interest rate of 9% compounded quarterly, what is the theoretical forward price of silver for delivery in 9 months? please provide the theoretical forward price of silver for delivery in 9 months. thank you so much for the help, much appreciated!!Present Value of Amounts Due Assume that you are going to receive $210,000 in 10 years. The current market rate of interest is 11%. a. Using the present value of $1 table in Exhibit 5, determine the present value of this amount compounded annually. Round to the nearest whole dollar. $fill in the blank 1 1,378, 329 b. Why is the present value less than the $210,000 to be received in the future? The present value is less due to the compounding of interest over the 10 years.
- The current price of silver is $206 per ounce. The storage cost is $1 ounce per year, payable quarterly in advance. Assuming a constant annual interest rate of 9% compounded quarterly, what is the theoretical forward price of silver for delivery in 9 months? Please submit your answer rounded to the nearest integer - for example, if your answer is 19.8, round it to either 20. Enter answer hereQ3. A chip supplier signs a 15 year contract worth RM430 million at year zero.Ã Calculate the equivalent equal annual payments over the length of the contract, assuming an interest rate of 10% per year. 4. What is the future value at year 3 of the following set of cash flows if the discount rate is 14%? Year Cash Flow 0 1 2 120 130 170 3 180 Format: 92756000 Format : 694BONUS: If you expect to receive the following cash flow at the end of each year, what is the fair price of this financial contract that you should be willing to pay? Assume 5% interest rate, and round your answer to the nearest hundredth decimal point. Year 1 2 3 4 CF $1000 $2000 $3000 $7000
- Give the Given, solution and cash flow diagram Benchie owns a legal instrument, due three years hence, whose maturity value is P6,700.48. What is the value of this note now if the rate of interest is ten percent compounded semi-annually? A.P5,000.00 B. P4,020.29 C. P2,010.14 D. P335.00Use the following spot rates to answer the following questions. Maturity Spot rate (%) 1 year 4.93% 2-years 4.47% 3-years 4.12% 5-years 3.84% 10-years 3.68% Assume that Citibank is offering to sell a one-year Treasury bill next year with a rate of 5% (i.e., you can enter into a contract today to lock in a 5% return on a one-year security purchased/sold next year). Based on the above spot rates, does the Citibank offer generate any arbitrage opportunities? If so, compute the total $ profits that can be generated from this opportunity, specifying the steps you would take. Assume you will borrow/invest $1,000. O Yes: profit of $5.55/ $1000 borrowed. O No: $0 O No: Loss of $5.55/ $1000 borrowed.based on Citibank's offered rate. O Yes: $55.55/$1000 borrowed.What is the present value of $500 per year, at a discount rate of 8.25 percent, if the first payment is received 8 years from now and the last payment is received 18 years from now? Question 4 options: $2,126 $1,944 $1,761 $2,166 $2,025
- Question 1 What is the future value of $650 deposited for one year earning an 10 percent interest rate annually? (Do not round intermediate calculations. Enter your answer as a whole number.) Future valuePresent Value of Amounts Due Assume that you are going to receive $620,000 in 10 years. The current market rate of interest is 5.5%. a. Using the present value of $1 table in Exhibit 5, determine the present value of this amount compounded annually. Round to the nearest whole dollar. 6,599,39 X b. Why is the present value less than the $620,000 to be received in the future? The present value is less due to inflation X over the 10 years.What is the value today of receiving $2,581.00 per year forever? Assume the first payment is made next year and the discount rate is 8.00%. #11 O Submit Answer format: Currency: Round to: 2 decimal places. # 12 e What is the value today of receiving $1,569.00 per year forever? Assume the first payment is made 5.00 years from today and the discount rate is 7.00%. Submit Answer format: Currency: Round to: 2 decimal places.
