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Essay / Research Paper Abstract
This 3 page paper considers how an investor can determine at what price they will be prepared to buy an equity futures contract. The paper uses the company McDonalds in 2006 as an example to show the different considerations. The bibliography cites 4 sources.
Page Count:
3 pages (~225 words per page)
File: TS14_TEMcDoneqit.rtf
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Unformatted sample text from the term paper:
movements and not all shares will follow the stock market, some prices may have severe declines and companies may cease trading. An investor will want to asses a range of
factors before considering the price they will be prepared to pay for any shares. The factors may include the level of risk, the expected level of profit, the profit that
could be made elsewhere and nature of the investors, whether they want a long term investment or want a quick profit (Howells and Bain, 2003). Of looking at buying an
equity future then there will be a dire to buy it at a price lower than the investors believes the market will be at in the future. If we
look at a company such as McDonalds we can consider the way the shares may be valued by looking at the price an investor such as the student would
be prepared to pay. The stock symbol is MCD (not MC). Using this we can assess the prices for the equity futures. The first consideration may be the volatility
risk and past performance and the way this may impact on future growth. If we look at the share price, the current market price is $42.03 at the close of
business on the 8th November 2006 (Yahoo Finance, 2006). This would mean a price of $420.30 for 100 shares excluding the costs. The recent trend has been generally upward
for the last few years; there was a dip between March 2006 and July 2006 when the price has returned to tits upwards trends. This is seen in the current
52 week highs and lows the current price is near the high which is $42.48 and the low was $31.73. This indicates that although there are peaks and troughs there
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