Consider the CEO of a U.S. financial Institution "Patriot Ltd" who is trying to tailor the needs of a corporate client in Dubai UAE. Calculate the values of the Future Contracts on Brent Oil in NYSE given the following parameters? 1. S-85, X=81, t= 4/12, r=5%, and the variance =0.64, Risk free rate=3%. 2.These contracts are traded in the Chicago Board of Exchange Market at $7.50 dollars. Are these overvalued or undervalued? 2

Consider the CEO of a U.S. financial Institution "Patriot Ltd" who is trying to tailor the needs of a corporate client in Dubai UAE. Calculate the values of the Future Contracts on Brent Oil in NYSE given the following parameters? 1. S-85, X=81, t= 4/12, r=5%, and the variance =0.64, Risk free rate=3%. 2.These contracts are traded in the Chicago Board of Exchange Market at $7.50 dollars. Are these overvalued or undervalued? 2

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter16: Country Risk Analysis

Section: Chapter Questions

Problem 14QA

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