Find the total yield(%) on the initial investment for the given contract (per 1000 ton contract): The expiring Coal one-year forward contract future price = $210.00 per ton. Spot price (at inception) = $200.00. A margin of 5% of the contract’s face value ($210,000) was deposited in form of a T-bill earning 3% for the year. a. 5% b. 98% c. 95% d. -2%
Find the total yield(%) on the initial investment for the given contract (per 1000 ton contract): The expiring Coal one-year forward contract future price = $210.00 per ton. Spot price (at inception) = $200.00. A margin of 5% of the contract’s face value ($210,000) was deposited in form of a T-bill earning 3% for the year. a. 5% b. 98% c. 95% d. -2%
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section10.A: Mutually Exclusive Investments Having Unequal Lives
Problem 2P
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Find the total yield(%) on the initial investment for the given contract (per 1000 ton contract):
The expiring Coal one-year forward contract future price = $210.00 per ton.
Spot price (at inception) = $200.00.
A margin of 5% of the contract’s face value ($210,000) was deposited in form of a T-bill earning 3% for the year.
a. 5%
b. 98%
c. 95%
d. -2%
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