The spot price of gasoline is 106 cents per gallon and the annualized risk free interest rate is 4.0%. Given a lease rate of 1.0%, a continuously paid storage rate of 0.5%, and a convenience yield of 0.75%, what is the no-arbitrage price range of a 1-year
A)
108.96 to 109.78
B)
107.42 to 108.96
C)
106.00 to 108.96
D)
107.42 to 109.78
Answer:
A
You might also like to view...
Addleman Corporation has an activity-based costing system with three activity cost pools-Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow:Overhead costs: Equipment expense$73,000Indirect labor$1,000??Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools ProcessingSupervisingOtherEquipment expense0.200.100.70Indirect labor0.200.200.60Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to
products. Activity data for the company's two products follow:Activity: MHs (Processing)Batches (Supervising)Product W37,600100Product H32,400900Total10,0001,000Finally, the costs of Processing and Supervising are combined with the following sales and direct cost data to determine product margins.Sales and Direct Cost Data: Product W3Product H3Sales (total)$159,500$154,100Direct materials (total)$66,300$55,300Direct labor (total)$77,800$84,100How much overhead cost is allocated to the Supervising activity cost pool under activity-based costing? A. $7,500 B. $200 C. $7,300 D. $51,700
In Laffey v. Northwest Airlines, Laffey filed a class action suit against NWA, claiming that the refusal to hire females as pursers violated Title VII and that the differential pay scale and allowances for male pursers and female attendants violated Title VII and the:? A) ?Equal Pay Act
B) ?Sarbanes-Oxley Act. C) ?National Labor Relations Act. D) ?Gender Discrimination Act.
Hofstede's Cultural Dimensions helps explain how workers from different cultures might react in the workplace. The Long-Term Orientation dimension could help explain the different approaches toward:
A. Dealing with uncertainty B. Dealing with differences in power structure C. Emphasizing short-term and long-term results D. Emphasizing results over process
Spot awards are examples of group incentive plans.
Answer the following statement true (T) or false (F)