The current market value of any real or financial assets is the present value of the cash flows accruing to that asset discounted by a market determined risk-adjusted required rate of return, with exception for options which are priced via no arbitrage risk-free arguments.  In no more than 250 words, explain what this means.  Using one or more of our present value formulas would be very helpful. Also, do not worry about the option part.

Posted Date: 3/21/2013 6:16:29 AM | Location : United States

Ask an Expert

Related Discussions:- Explain arbitrage risk free arguments, Assignment Help, Ask Question on Explain arbitrage risk free arguments, Get Answer, Expert's Help, Explain arbitrage risk free arguments Discussions

Write discussion on Explain arbitrage risk free arguments
Your posts are moderated

Write your message here..

Related Questions

Asset Securitization Structures (Excel help), #questAs an assistant vice pr... #questAs an assistant vice president at a regional bank, your boss has tasked you to acquire $100 million of residential mortgages to be securitized in a pass-through MBS. There mu

Calculate super normal profit, The economic analysis is done for Schlumberg... The economic analysis is done for Schlumberger, oilfield service company. They are # 1 in terms of market caps, revenue and employees globally. If any references are used / outside

Operating cycle, discuss the applicability of an operating cycle of a veget... discuss the applicability of an operating cycle of a vegetable growing business

Which ratios is potential long term bond investor, Which ratios would a pot... Which ratios would a potential long-term bond investor be most interested in? Explain. Potential and Current lenders of long-term funds, like banks and bondholders, are interest

Functional classification of mutual funds, Functional Classification of Mut... Functional Classification of Mutual Funds Functional classification of Mutual Funds is based on the basic characteristics of the mutual fund schemes for subscription. Mutual Fu

Fraud and society and analytical techniques, Fraud and Society and Analytic... Fraud and Society and Analytical Techniques: Fraud and Society - The effects and financial consequences of fraud in society including the individual, older people, financial

Cvp, Info on applying CVP to product mix limiting factors Info on applying CVP to product mix limiting factors

Corporate governance features, Corporate Governance features Corporat... Corporate Governance features Corporate compliance: The BOD should make sure that corporation obeys with all related laws, governance practices, regulations, accounting an

Deterministic model, Deterministic Model After the macroeconomic, indus... Deterministic Model After the macroeconomic, industrial and business analysis of the company chosen is done First of all a point estimate for all the input variables in a valua

Display profit diagrams for long stock and for short stock, Question: (... Question: (a) A stock currently sells for $80 and a put option with an exercise price of $80 currently sells for $2. Find the percentage gain to an investor in the common stock