2. On January 1, 2022, ABC Corporation entered into a 60-day put option contract for $30,000. Based on the PHP-USD rates below, what is the intrinsicvalue of the contract on Mar. 2, 2022?January 1, 2022Spot Rate30-day Forward Rate60-day Forward RateJanuary 30, 2022Spot Rate30-day Forward Rate60-day Forward RateMar. 2, 2022Spot Rate30-day Forward Rate60-day Forward RateBuying Rate55.1055.4155.93Buying Rate55.3855.7156.04Buying Rate55.8855.9355.95Selling Rate55.6755.4355.96Selling Rate55.7556.1756.61Selling Rate55.7355.7955.82

A put option: A put option gives its holder the right, but not the obligation to sell the underlying…

Answered: 2. On January 1, 2022, ABC Corporation…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 9MC

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a. On January 1st, 2021, an investor enters into a 9-month forward contract on an asset. In February,April, June, and September, dividends are paid on the asset at a rate of 3%. In other months,dividends are paid at a rate of 2%. All dividend yields are expressed in semiannual compounding.The risk-free rate of interest over the period is 8% per annum with continuous compounding andthe asset is worth $45.00 at contract initiation.What is the no-arbitrage price of the forward contract? b. What is the Convenience Yield and what does a higher or lower convenience yield reflect? c. Coming out of the COVID-19 pandemic and considering the Russia-Ukraine war, would youexpect the convenience yield to lead to a normal or inverted market for oil futures prices?Explain
a. On January 1st, 2021, an investor enters into a 9-month forward contract on an asset. In February, April, June, and September, dividends are paid on the asset at a rate of 3%. In other months, dividends are paid at a rate of 2%. All dividend yields are expressed in semiannual compounding. The risk-free rate of interest over the period is 8% per annum with continuous compounding and the asset is worth $45.00 at contract initiation. What is the no-arbitrage price of the forward contract? b. What is the Convenience Yield and what does a higher or lower convenience yield reflect? c. Coming out of the COVID-19 pandemic and considering the Russia-Ukraine war, would you expect the convenience yield to lead to a normal or inverted market for oil futures prices? Explain NEED ANSWERS PLEASE
On January 1, 2021, SPX Company sold an inventory costing P110,000 for P150,000. A 10% down payment was made and the balance payable in 4 equal installments of P33,750, payable semi-annually starting June 30 and December 31, 2021. The market rate of interest is 12%. (Round off present value factor to three decimal places). Selling expenses related with the installment sale is P5,000. How much is the significant financing component in the contract? A.40,000B.21,943,75C.18,056,25D.16,943,75

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