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Valuation of Futures Contracts - Assignment Example

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Author : gerholdjoey

Summary

Finance and accounting Name: Institution: Day one Day two Day Three Day Four Settlement price (SE)$ 1.3140 1.3126 1.3133 1.3040 Account balance (AS) $ 1700 1698.19 1697.28 1710.30 Net asset value (NAV)$ (SE x AS) 2233.8 2229.04 2230.23 2213.25 Account Balance on day two equals to NAV of Day one divide by settlement price for day two The settlement price seems to be on a constant downward trend…

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Valuation of Futures Contracts

The future looks gloomy for this stock Factors affecting perfomance of cooprate bond Prevailing interest rates Idealy corprate bonds offer better yield prospects than government bonds but that’s because of the risk involved. This is happens so as to entice the investors to turn their attention away from the treaeury bonds and securities. Since most often than not, the performance of corprate bonds are pegged against that of treasury bonds. The prices at which the later are quoted really maters, the amount of yield they produce also matters a lot. When the yield of a bonds future is less than that of prevailing treasury bonds, such a bond is considered to be under performing. When the Government issues bonds at better prices than that of the corporate bonds the demand shifts to the government bonds thus the laws of demand and supply come into play hence forcing the corporate bond’s price to dip. The opposite happens when the government bonds are not that attractive which is very rare. Overal perception of the investor Whenever global news headlines are positive and encouraging, investors tend to be more open minded and open to opportunities across the globe. ...
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