One chicago has just introduced a new single stock futures contract on the stock of brandex, a company that currently pays no dividends. each contract calls for delivery of 1,000 shares of stock in one year. the t-bill rate is 6% per year.

a. if brandex stock now sells at $120 per share, what should the futures price be?

b. if the brandex stock price drops by 3%, what will be the change in the futures price and the change in the investor’s margin account?

c. if the margin on the contract is $12,000, what is the percentage return on the investor’s position?

Winners of the georgia lotto drawing are given the choice of receiving the winning amount divided equally over 2121 years or as a lump-sum cash option amount. the cash option amount is determined by discounting the annual winning payment at 88% over 2121 years. this week the lottery is worth $1616 million to a single winner. what would the cash option payout be?

There are three factors that can affect the shape of the treasury yield curve (r* t , ip t , and mrp t ) and five factors that can affect the shape of the corporate yield curve (r* t , ip t , mrp t , drp t , and lp t ). the yield curve reflects the aggregation of the impacts from these factors. suppose the real risk-free rate and inflation rate are expected to remain at their current levels throughout the foreseeable future. consider all factors that affect the yield curve. then identify which of the following shapes that the us treasury yield curve can take. check all that apply.a. downward-sloping yield curveb. upward-sloping yield curvec. inverted yield curve

Afinancing project has an initial cash inflow of $42,000 and cash flows of −$15,600, −$22,200, and −$18,000 for years 1 to 3, respectively. the required rate of return is 13 percent. what is the internal rate of return? should the project be accepted?