What is the market price of a zero-coupon bond

Assignment Help Financial Management

Reference no: EM13765679

FedEx is selling for $110 a share. A FedEx call option with one month until expiration and an exercise price of $126 sells for $2.40 while a put with the same strike and expiration sells for $17.70.

a. What is the market price of a zero-coupon bond with face value $126 and 1 month maturity? (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Reference no: EM13765679

Questions Cloud

What is the purpose of working capital : What is the purpose of working capital? What is the working capital cycle and why must it be managed?

Benefits to annual costs of this runway construction project : The construction of a new runway at an airport will cost $30 million, to be paid with capital development bonds over a 20-year period. The runway is expected to decrease the average aircraft delay from 9 to 5 min. The average annual demand is expecte..

Attempting to value a call option with an exercise price : You are attempting to value a call option with an exercise price of $108 and 1 year to expiration. The underlying stock pays no dividends, its current price is $108, and you believe it has a 50% chance of increasing to $130 and a 50% chance of decrea..

Many states prohibited bank branching : Many states prohibited bank branching because of all of the following except:

What is the market price of a zero-coupon bond : FedEx is selling for $110 a share. A FedEx call option with one month until expiration and an exercise price of $126 sells for $2.40 while a put with the same strike and expiration sells for $17.70. What is the market price of a zero-coupon bond with..

How much interest will stone pay over the life of the loan : Stone got a 4% 30- year mortgage for $295,200. His bank sent him a statement to notify him of his new monthly PITI payment, $1809 ( $1409 for principal and interest, $308 for taxes and $92 for homeowner's insurance). How much interest will Stone pay ..

What is ratio analysis : What is ratio analysis? Also briefly describe the three basic categories or ways that ratio analysis is used.

Differentiate between outsourcing and off shoring : Differentiate between outsourcing and off shoring. Analyze the pros and cons of these practices.

Describe the product life cycle for managing products : Describe the product life cycle as a useful tool for managing products after they have been introduced to foreign markets.

User Account

All Pages