Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

You hold 1 million barrels of oil at a current price of S0 = $25 per barrel. The current quoted futures price for delivery of oil in about 1 years' time is F = $26.25 per barrel. You want to hedge your spot oil position by using futures. The spot price of oil in 11½ months' time is S1 = $20 per barrel and the futures price (for delivery in 2 weeks) is F1 = 20.042 ($ per barrel). What is the effective value of your hedged position in 11½ months' time?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M940477

Have any Question? 


Related Questions in Basic Finance

Suppose you think msft stock is going to appreciate

Suppose you think MSFT stock is going to appreciate substantially in the next yr. The stock's current price is $100and call options expiring in 1 yr has an exercise price of $100 and is selling for $5. With $1,000 to inv ...

1 describe and contrast the role of rfdc and rfid for

1. Describe and contrast the role of RFDC and RFID for logistics and supply chain applications. 2. Discuss the relative benefits of software purchase, use of third-party providers, and use of application service provider ...

In problem 1012 how far upstream does the flow from the

In Problem 10.12, how far upstream does the flow from the source reach? Problem 10.12 For the case of a source at the origin with a uniform free stream plot the streamline ψ = 0.

Rosa inc has arranged a one-year 2 million credit line with

Rosa Inc. has arranged a one-year, $2 million credit line with its lead bank. The bank set the interest rate at the prime rate plus a spread of 1.50 percent. The prime rate is expected to remain stable at 5.25 percent du ...

Normas cat food of shell knob ships cat food throughout the

Norma's Cat Food of Shell Knob ships cat food throughout the country. Norma has determined that through the establishment of local collection centers around the country, she can speed up the collection of payments by two ...

You buy a stock for 35 per share one year later you receive

You buy a stock for $35 per share. One year later you receive a dividend of $3.50 per share and sell the stock for $30 per share. What is your total rate of return on this investment? What is your capital gain or loss yi ...

If you wish to catch a breakout higher in the market but

If you wish to catch a breakout higher in the market but are concerned about paying too much, which type of order should you use? If you want to place both a stop and a limit order on a position, which type of order shou ...

1 labor budget calculating the fixed labor budget instead

1. Labor budget: calculating the fixed labor budget. Instead of the benefits stated in Exhibit l.4e, assume that all benefits are 210/6 and all raises are 3.5% and calculate the fixed labor budget for January, February, ...

Question 1 international investment decisionscarpet baggers

Question 1. International Investment Decisions. Carpet Baggers Inc. is proposing to construct a new bagging plant in a country in Europe. The two prime candidates are Germany and Switzerland. The forecast cash flows from ...

A research concludes that the number of hours of exercise

A research concludes that the number of hours of exercise per week for adults is normally distributed with a mean of 3.5 hours and a standard deviation of 3 hours. Show all work. Just the answer, without supporting work, ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen