Research Paper

770 WordsJul 3, 20134 Pages
FIN301 Principles of Finance SESSION LONG PROJECT MODULE 2 Present Value TUI University June 10, 2013 Carnival Corporation is my company of choice for this course. As pointed out previously, the share price rose $1.80 from 2012 to 2013. Using this data and data gathered from Yahoo Finance, I will determine the futures price of 100 shares in 2014. Futures price is defined as the price at which the two participants in a futures contract agree to transact on the settlement date (Futures Price, n.d.). If I were to go into agreement to buy shares of…show more content…
This is what I will pay regardless of the price of the shares at the end of this agreement. Though looking at the past price, there is a chance to have a slight profit. The stock price has been steady for the past year, so I believe this would be a safe futures contract as a new investor. And there is potential for profit as six months prior, the stock price was $37.14, which would be 8% more and a $2.60 profit based on the price I agreed to pay at the end of our 12-month contract in June 2014. The total profit would be $2.60 X 100 = $260. Based on this and other data on the stock screener, the stock seems pretty stable. There is more of a chance to gain a profit from this purchase than if I were to place $3,449 in my bank account. My bank account currently provides a .25% annual percentage yield. Therefore, where I could gain $260 in a one year period with the futures price, I would gain much less if it were in my bank account. $3,449 X .0025 = $8.62 would be the amount I would gain which is a difference of $251.38 that I could possibly forfeit if I decided to use this method instead. While there are many options for investing, I would pick the futures price option over my back account and their CD-options, which is still only .71% for one year. This is
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