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In: Finance
The Chicago Mercantile Exchange has announced the introduction of a financial instrument that is based on...
The Chicago Mercantile Exchange has announced the introduction of a financial instrument that is based on rainfall in the state of Illinois. The standard agreement states that for each inch of rain over and above the average rainfall for a particular month, the seller will pay the buyer $1,000. What kind of financial instrument is this? Who could benefit from buying such a contract?
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Today's settlement price on a Chicago Mercantile Exchange (CME) € futures contract is $1.7537/€. Your initial...
Today's settlement price on a Chicago Mercantile Exchange (CME)
€ futures contract is $1.7537/€. Your initial performance bond is
at $2,000. The maintenance performance bond is $1,600. The next
three days' settlement prices are $1.7670/€, $1.7219/€, and
$1.6985/€. (The contractual size of one CME € contract is €62,500).
You take a long position in one futures
contract (buy €), what is the total additional fund you need to
deposit so that you keep your marginal account for the three
days?...
1. How many types of commodities are available for trading in Chicago Mercantile exchange? 2. How...
1. How
many types of commodities are available for trading in Chicago
Mercantile exchange?
2. How
far into the future can you trade on the prices of these
commodities?
3.
Which types of commodities are expected to have increased
(decreasing) prices in the future?
Assume today’s settlement price on a Chicago Mercantile Exchange EUR (euro) futures contract is $.0564/MXN.
Assume today’s settlement price on a Chicago Mercantile
Exchange EUR (euro) futures contract is $.0564/MXN. You BUY a futures contract to hedge an exposure to MXN10,000,000 payable. Your initial margin account
balance is $15,000. The next three days’ settlement prices are
$.0566/MXN, $.0563/MXN, and $.0561/MXN. Calculate the changes in
the margin account (and the new balances) from daily
marking-to-market adjustments over the next three days. The
contract size is 10,000,000 Mexican Pesos.ANS: DAY
0
MB = $15,000 DAY 1 ∆ =
_________
MB...
FIN303: Financial Management Company ABC has just announced earnings of $2 per share. Based on the...
FIN303: Financial Management
Company ABC has just announced earnings of $2 per share. Based
on the last five years, earnings have grown at a rate of 20% per
annum and the company expects this to continue for the next five
years, after which it expects earnings to remain constant forever.
The company has a policy of paying out 30% of its earnings as
dividends. ABC stock has a beta of 1.2. The yield to maturity on
10-year government bonds is...
Please discuss with examples what is a primary financial instrument and what is a derivative financial instrument?
According to AASB 132, please answer:Please discuss with examples what is a primary financial instrument and what is a derivative financial instrument?
AGOURA MANUFACTURING MINI-CASE Agoura Manufacturing has announced the introduction of a new product. They forecast product-...
AGOURA
MANUFACTURING MINI-CASE
Agoura Manufacturing
has announced the introduction of a new product. They forecast
product- specific sales demand to last five years. Then because
this product is somewhat of a fad, they will terminate the project.
Manufacturing of the product will require the acquisition of an
existing facility and purchase and installation of some new
equipment. The following information describes the new project:
Capital Investment requirement:
Cost of new plant
and equipment: $13,750,000 Shipping
and installation
costs:
$ 465,000...
AGOURA MANUFACTURING MINI-CASE Agoura Manufacturing has announced the introduction of a new product. They forecast product-...
AGOURA
MANUFACTURING MINI-CASE
Agoura Manufacturing
has announced the introduction of a new product. They forecast
product- specific sales demand to last five years. Then because
this product is somewhat of a fad, they will terminate the project.
Manufacturing of the product will require the acquisition of an
existing facility and purchase and installation of some new
equipment. The following information describes the new project:
Capital Investment requirement:
Cost of new plant
and equipment: $13,750,000 Shipping
and installation
costs:
$ 465,000...
AGOURA MANUFACTURING MINI-CASE Agoura Manufacturing has announced the introduction of a new product. They forecast product-...
AGOURA
MANUFACTURING MINI-CASE
Agoura Manufacturing
has announced the introduction of a new product. They forecast
product- specific sales demand to last five years. Then because
this product is somewhat of a fad, they will terminate the project.
Manufacturing of the product will require the acquisition of an
existing facility and purchase and installation of some new
equipment. The following information describes the new project:
Capital Investment requirement:
Cost of new plant
and equipment: $13,750,000 Shipping
and installation
costs:
$ 465,000...
AGOURA MANUFACTURING MINI-CASE Agoura Manufacturing has announced the introduction of a new product. They forecast product-...
AGOURA
MANUFACTURING MINI-CASE
Agoura Manufacturing
has announced the introduction of a new product. They forecast
product- specific sales demand to last five years. Then because
this product is somewhat of a fad, they will terminate the project.
Manufacturing of the product will require the acquisition of an
existing facility and purchase and installation of some new
equipment. The following information describes the new project:
Capital Investment requirement:
Cost of new plant
and equipment: $13,750,000 Shipping
and installation
costs:
$ 465,000...
What is a Eurodollar instrument? Select one: a. A financial instrument relevant for both Europe as...
What is a Eurodollar instrument? Select one:
a. A financial instrument relevant for both Europe as well as
USA
b. None of these
c. US Dollar instrument held in Europe or elsewhere outside
USA
d. An instrument purchased in dollars in USA and used in
Europe
e. Euro currency instrument held in countries accepting US
Dollar as a legal tender
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