Business, 17.06.2020 23:57 leslop

BlackRock, Inc. is an American global investment management corporation based in New York City. Founded in 1988, initially as a risk management and fixed income institutional asset manager, BlackRock is today the world's largest asset manager with $7 trillion in assets. Suppose Blackrock stock (ticker: BLK) is trading at $400 and pays a discrete dividend of $3 to its shareholders once per quarter, the first dividend of $3 to be paid in 0.25 years from today, the second dividend of $3 to be paid in 0.5 years from today, the third dividend of $3 to be paid in 0.75 years from today, and the fourth dividend of $3 to be paid in 1 year from today. The continuously compounded annual risk-free interest rate that you can lend or borrow at is 8%. In this problem, you are to use continuous compounding of interest in all computations. Required:
a. What is the fair value price for a one-year prepaid forward contract on BLK?
b. Suppose the market prices for a normal (not prepaid) 1-year forward contract on Blackrock are as follows:

bid price for BLK forward contract: $520.95
ask price for BLK forward contract: $530.95

Does an arbitrage opportunity exist? If so, specify the exact components of the portfolio you need to capture the arbitrage, and the exact arbitrage profit.

Answers: 3

Show answers

Another question on Business

Business, 21.06.2019 16:10

Acustomer has come to your department with an urgent question. you promised her that you would collect information about her question and answer it by noon. it will take you at least 20 minutes to gather the information needed to provide an answer. it is now 11: 50 a.m. your supervisor just scheduled a 30-minute meeting to start at noon. this meeting is for all employees in your department. you decide to:

Answers: 2

Answer

Business, 22.06.2019 05:30

Laurelton heating & cooling installs and services commercial heating and cooling systems. laurelton uses job costing to calculate the cost of its jobs. overhead is allocated to each job based on the number of direct labor hours spent on that job. at the beginning of the current year, laurelton estimated that its overhead for the coming year would be $ 61 comma 500. it also anticipated using 4 comma 100 direct labor hours for the year. in april comma laurelton started and completed the following two jobs: (click the icon to view the jobs.) laurelton paid a $ 20-per-hour wage rate to the employees who worked on these two jobs. read the requirements requirement 1. what is laurelton's predetermined overhead rate based on direct labor hours? determine the formula to calculate laurelton's predetermined overhead rate based on direct labor hours, then calculate the rate. / = predetermined overhead rate

Answers: 2

Answer

Business, 22.06.2019 07:30

Most states have licensing registration requirements for child care centers and family daycare homes. these usually include minimum standard for operation. which of the following would you most likely find required in a statement of state licensing standards for child care centers?

Answers: 2

Answer

Business, 22.06.2019 10:30

On july 1, oura corp. made a sale of $ 450,000 to stratus, inc. on account. terms of the sale were 2/10, n/30. stratus makes payment on july 9. oura uses the net method when accounting for sales discounts. ignore cost of goods sold and the reduction of inventory. a. prepare all oura's journal entries. b. what net sales does oura report?

Answers: 2

Answer

You know the right answer?

BlackRock, Inc. is an American global investment management corporation based in New York City. Foun...

Questions