Finance Assignment/ Professional Essay Writers

1. In the absence of interest-rate uncertainty and delivery options, futures and forward prices must be the same. Does this mean the two contracts have identical cash- ow implications? (Hint: Suppose you expected a steady increase in prices. Would you prefer a futures contract with its daily mark-to-market or a forward with its single mark-to-market at maturity of the contract? What if you expected a steady decrease in prices?)

Don't use plagiarized sources. Get Your Assignment on
Finance Assignment/ Professional Essay Writers
Just from $13/Page
Order Now

2. Consider a forward contract on a non-dividend-paying stock. If the term structure of interest rates is at (that is, interest rates for all maturities are the same), then the arbitrage-free forward price is obviously increasing in the maturity of the forward contract (i.e., a longer-dated forward contract will have a higher forward price than a shorter-dated one). Is this statement true even if the term-structure is not at?

Custom Assignment Help

3. The spot price of copper is $1.47 per lb, and the forward price for delivery in three months is $1.51 per lb. Suppose you can borrow and lend for three months at an interest rate of 6% (in annualized and continuously compounded terms).

(a) First, suppose there are no holding costs (i.e., no storage costs, no holding bene ts). Is there an arbitrage opportunity for you given these prices? If so, provide details of the cash cows. If not, explain why not.

(b) Suppose now that the cost of storing copper for three months is $0.03 per lb, payable in advance. How would your answer to Part (a) change? (Note that storage costs are asymmetric: you have to pay storage costs if you are long copper, but you do not receive the storage costs if you short copper.)

4. The SPX index is currently trading at a value of $1,265, and the FESX index (the Dow Jones EuroSTOXX Index of 50 stocks, referred to from here on as STOXX”) is trading at e3,671. The dollar interest rate is 3% , and the euro interest rate is 5%. The exchange rate is $1.28/euro. The six-month futures on the STOXX is quoted at e3,782. All interest rates are continuously compounded. There are no borrowing costs for securities.

Custom Assignment Help

(a) Compute the correct six-month forward futures prices of the SPX, STOXX, and the currency exchange rate between the dollar and the euro.

(b) Is the futures on the STOXX correctly priced? If not, show how to undertake an arbitrage strategy assuming you are not allowed to undertake borrowing or lending transactions in either currency.

5. The current level of a stock index is 450. The dividend yield on the index is 4% (in continuously compounded terms), and the risk-free rate of interest is 8% for six-month Sundaram & Das: Derivatives – Problems and Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 investments. A six-month futures contract on the index is trading for 465. Identify the arbitrage opportunities in this setting, and explain how you would exploit them. Get Finance Help Today

Calculate your paper price
Pages (550 words)
Approximate price: -

Why Choose Us

Quality Papers

At Myhomeworkwriters.com, we always aim at 100% customer satisfaction. As such, we never compromise o the quality of our homework services. Our homework helpers ensure that they craft each paper carefully to match the requirements of the instruction form.

Professional Academic Writers

With Myhomeworkwriters.com, every student is guaranteed high-quality, professionally written papers. We ensure that we hire individuals with high academic qualifications who can maintain our quality policy. These writers undergo further training to sharpen their writing skills, making them more competent in writing academic papers.

Affordable Prices

Our company maintains a fair pricing system for all academic writing services to ensure affordability. Our pricing system generates quotations based on the properties of individual papers.

On-Time delivery

My Homework Writers guarantees all students of swift delivery of papers. We understand that time is an essential factor in the academic world. Therefore, we ensure that we deliver the paper on or before the agreed date to give students ample time for reviewing.

100% Originality

Myhomeworkwriters.com maintains a zero-plagiarism policy in all papers. As such, My Homework Writers professional academic writers ensure that they use the students’ instructions to deliver plagiarism-free papers. We are very keen on avoiding any chance of similarities with previous papers.

Customer Support 24/7

Our customer support works around the clock to provide students with assistance or guidance at any time of the day. Students can always communicate with us through our live chat system or our email and receive instant responses. Feel free to contact us via the Chat window or support email: support@myhomeworkwriters.com.

Try it now!

Calculate the price of your order

You will get a personal manager and a discount.
We'll send you the first draft for approval by at
Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Homework Writing Services

My Homework Writers holds a reputation for being a platform that provides high-quality homework writing services. All you need to do is provide us with all the necessary requirements of the paper and wait for quality results.

Essays

Essay Writing Services

At My Homework Writers, we have highly qualified academic gurus who will offer great assistance towards completing your essays. Our homework writing service providers are well-versed with all the aspects of developing high-quality and relevant essays.

Admissions

Admission and Business Papers

With Myhomeworkwriters.com, we will help you secure a position at your desired institution. Our essay writing services include the crafting of admissions papers. We will still help you climb your career ladder by helping you write the official papers that will help you secure a job. We will guide you on how to write an outstanding portfolio or resume.

Editing

Editing and Proofreading

Myhomeworkwriters.com has a professional editorial team that will help you organize your paper, paraphrase it, and eliminate any possible mistakes. Also, we will help you check on plagiarism to ensure that your final paper posses quality and originality.

Coursework

Technical papers

My Homework Writers harbors professional academic writers from diverse academic disciplines. As such, we can develop homework writing services in all academic areas. The simplicity or complexity of the paper does not affect the quality of homework writing services.