Please show all work and formulasa coca-cola bond futures, Ask an Expert

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Please show all work and formulas

A Coca-Cola bond futures contract settles at 105-8.

a. What is the present value of the Coca-Cola futures contract?

b. If the contract settles at 105-8, are current market interest rates higher or lower than the standardized rate on a futures contract? Explain.

c. What is the implied annual interest rate on the futures contract?

d. Calculate the new value of the futures contract if interest rates increase by 1 percentage point annually.

e. Calculate your profit or loss if you sold a futures contract at 105-8 and purchased an offsetting contract when rates increased by 1 percentage point annually.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91769096

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