MC – Cat Bonds (catastrophe bonds)
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
When insurance companies issue Cat bonds, who do they share their risks with?
MC – Seller of Forward Contract
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
What does the seller of a forward contract agree to do?
MC – Value of Standard and Poor’s Futures Contract
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
Determine the value of a futures contract on the Standard and Poor’s Index given the current level of the index, the dividend yield, and the risk-free rate.
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Problem 26-04, Gold-mining firm Total Revenues
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
Given the current price of gold, and uncertainty about how high or how high it can go over the next month, determine the revenues if the firm is unhedged, or if the firm uses futures contracts, and if the firm uses a put option to hedge its position.
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Problem 26-05, Petrochemical Parfum (PP) Options and Futures Contracts
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
Given three prices for oil, compute the payoffs of futures and the payoffs of using options if the firm decides to protect itself.
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Problem 26-09, Futures Contract Value
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
Given the interest rate, the spot price, and the coupon rate, determine the contract value of a futures contract written on a Treasury bond.
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Problem 26-13, Interest Rate in Gold Futures
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
Given three futures prices for various contract lengths, determine the interest rate for each assuming that there is no convenience yield.
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Problem 26-14, Commodities and Financial assets
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
Determine the future price of Magnoosium, Oat bran, Biotech stock index, Allen Wrench Co. common stock, 5-year Treasury note, and the Westonian ruple based on a table of information.
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Problem 26-15, Magnoosium Scrap
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
Given the spot price, the future price, the interest rate, and the storage costs.., determine the convenience yield.
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Problem 26.01 – Calculating Synergy
Fundamentals of Corporate Finance
Ross, Westerfield, and Jordan
13th Edition
Given the cash offer and company worth… find the minimum estimated value of the synergistic benefits.
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