Can you help me please ? Suppose you observe the following one-year interest rates, spot exchange rates and futures prices. Futures contracts are available on €10,000. How much risk-free arbitrage profit could you make on one contract at maturity from this mispricing? Bid Interest Rate S0($/€) $1.45 = €1.00 i$ 4% F360($/€) $1.47 = €1.00 i€ 3% A) $59.22 B) $53.10 C) $49.42 D) none of the options

Someone, answer that but I don't get it:


A) $59.22

Explanation:

The futures are the contracts that are set in present for settlement at some future date. These contracts can be tailor made or over the counter. Usually futures trade in OTC market with defined contract size. In the given question the contract size is for €10,000. The denomination in dollar will be :

For Bid price : €10,000 * $1.45 / € = 14,500

For Ask price : €10,000 * $1.47 / € = 14,700

The difference in the bid-ask is 200.

The arbitrator could benefit from this price difference.

Consider the following scenarios. use what you have learned to decide if the goods and services being provided are individual, public, or merit goods. for each case, state what kind of good has been described and explain your answer using the definitions of individual, public, and merit goods. (6 points each) 1. from your window, you can see a city block that's on fire. you watch city firefighters rescue people and battle the flames to save the buildings. 2. while visiting relatives, you learn that your cousins attend a nearby elementary school that is supported financially by local property tax revenue. 3. you see a squadron of military jets flying overhead. 4. you find out that your aunt works for a defense manufacturing company that has several defense contracts with the government. she tells you that she works for a team that is producing a communications satellite. 5. your class visits a local jail run by a private, profit-making company that detains county criminals and is paid with tax revenue.

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?

Estimate the prouduct sovle using an area modelestimate the product you solve using an area model and the standard algorithm.remeber to express your products in the standard form