Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. eight months ago, the zeus fund entered into a sho

Eight months ago, the Zeus Fund entered into a short position in a one-year ...

70.2K

Verified Solution

Question

Accounting

Eight months ago, the Zeus Fund entered into a short position in a one-year
forward contract on 1,250 shares of Cerner Corporation stock at a forward contract price
of $94 per share. Today, the price of Cerner stock is $92.50 per share and the interest rate
for continuous compounding is 1%. Cerner stock does not pay dividends.
What is todays market value of the forward contract?
If the Zeus Fund wanted to exit the contract today, how much should it be willing to pay,
or how much should it expect to receive, from its counterparty?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

(2pts) Bond X is a premium $1000 par value bond making annual payments. The bond has...

Finance
Q

1. The refractive index of a transparent material can be determined by measuring the critical angle...

Physics
Q

Assume your group made a breakthrough in designing square-shaped microprocessors on which square-shaped transistors can be...

Physics
Q

Space-based solar is gaining interest. Arrays of solar panels are placed in orbit to capture solar...

Mechanical Engineering
Q

Why might a person wish to be involved with a critical path activity? What are some...

General Management
Q

In seed plants archegonia are produced inside the ovules of OA gymnosperms only OB angiosperms...

Biology
Q

49 A wire carrying a current i is placed in a magnetic field in the...

Physics
Q

Explain why the scratch algorithm works.Choose the correct answer below.A. The scratch marks represent the...

Basic Math
Q

Find the equation of the line tangent to the graph of y sin x at...

Calculus
Q

In accounting, which of the following financial statements provides information about a company's profitability over...

Accounting
Q

6. 357 points value: Laval produces lamps and home lighting fixtures. Its most popular product...

Accounting
Q

the question Does his budget work with his income (ie...

Finance