COMIND Index Is Computed by Averaging Commodity Prices

question 13

Multiple Choice

COMIND index is computed by averaging commodity prices.Compute the six-month forward price for this index if the spot price is 1,000 and the continuously compounded annual rates for various costs and benefits are 5 percent for the interest rate,2 percent for the dividend yield,3 percent for the storage cost,and 1 percent for the convenience yield.

• A) $1,021.05
• B) $1,025.32
• C) $1,030.45
• D) $1,040.81
• E) None of these answers are correct.

Comprehend the mechanisms and benefits of innovative securities in mortgage markets.

Identify and differentiate between various types of loan covenants and their purposes.

Grasp the mutual benefits and regulatory requirements of debt covenants for both lenders and borrowers.

Recognize common financial performance measures used in executive incentive plans.

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Definitions:

Discontinued Operations

Components of a business that have been disposed of or are held for sale and are not part of the company’s future operations.

Extraordinary Items

Unusual and infrequent gains or losses that are reported separately on the income statement to provide a clearer picture of a company's ongoing operational performance.

Accounting Principle

A general rule or guideline that prescribes the methodology for recording financial transactions and preparing financial statements.

Asset Account

An accounting record that shows the amount of economic resources owned or controlled by an entity.