Suppose that the yen-denominated interest rate is 2% and the dollar denominated rate is 6%. The current exchange rate is 0.009 dollars per yen.  What is the 1-year forward rate?

Suppose that the November price of corn is \(\$ 2.50\)/bushel, the effective monthly interst rate is 1%, and storage costs per bushel are \(\$ 0.05\)/month. Assuming that corn is stored from November to February, the February forward price must compensate owners for interest and storage. What is the February forward price?

 Suppose we have a mining project that will produce 1 ounce of gold every year for 6 years. The cost of this project is \(\$ 1100\) today, the marginal cost per ounce at the time of extraction is \(\$ 100\), and the continuously compounded interest rate is 6%. What is the net present value?

We want to compute the implied forward interest rate from year 2 to year 3 if  the 2^nd and 3^rd year bond yield are 6.50 and 7.00 respectively?

Suppose the current \(\$ /€\)     exchange rate is 0.9, the dollar-denominated interest rate is 6%, and the euro-denominated interest rate is 4%. By buying a dollar-denominated euro call with a strike of \(\$ 0.92\) and selling a dollar-denominated euro put with the same strike, we construct a position where in 1-year we will buy €1 by paying $0.92 what is the difference between the call premium and put premium

If \(u = \$ 59.954/\$ 41 = 1.4623\)  and \(d = \$ 32.903/\$ 41 = 0.8025\) With \(K = \$ 40,\) we have \({C_u} = \$ 59.954 – \$ 40 = \$ 19.954,\) and \({C_d} = 0\) What is the option price?

you have to decide whether to undertake one of two projects. Project A involves buying expensive machinery that produces a better product at a lower cost. The machines for Project A cost \(\$ 1000\) and if purchased, you anticipate that the project will produce cash flows of \(\$ 500\) per year for the next 5 years. Project B’s machines are cheaper costing \(\$ 800\), but they produce smaller annual cash flows of \(\$ 420\) per year for next 5 years. We’ll assume that the correct discount rate 12% and why

Suppose that the end of 1995 you invested \(\$ 1000\) in a security that subsequently paid you \(\$ 150\) at the end of each year from 1996, 1997,…, 2004. At the end of 2005, you sold the security for \(\$ 1.150\). Looking back you realize that the CPI went from 133 in 1995 to 195 in 2004. What was your real rate of return?

It is March 2000, and you are thinking of purchasing a share of XYZ Corp. Here are some facts about the company and its stock: XYZ is a steady payer of dividends; in the past it has paid dividends annually, and these dividends have tended to grow at an annual rate of 7%. The company just paid a dividend of $10 per share. This dividend was paid on March 1, the company’s traditional dividend payment date. You want to value XYZ shares by discounting the stream of future anticipated dividends.