Present value of a perpetuity

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What should be price of option based on risk neutral pricing : We are interested in pricing a 1-year put option on cisco with a strike price of K=100. Currently CISCO is trading at 80 and the risk free rate is 5% per annum. Suppose that we follow a Binomial model and CISCO may either appreciate by 50% or depreci..

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Present value of a perpetuity : Present Value of a Perpetuity A perpetuity pays $140 per year and interest rates are 6.9 percent. How much would its value change if interest rates increased to 9.4 percent?

What is maturity risk premium on six-year treasury security : Determinants of Interest Rate for Individual Securities The Wall Street Journal reports that the rate on 3-year Treasury securities is 8.80 percent, and the 6-year Treasury rate is 9.20 percent. Further, you expect that real interest rates will be 4...

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Cisco will not pay any dividend : We are interested in pricing a 1-year put option on cisco with a strike price of K=100. Currently CISCO is trading at 80 and the risk free rate is 5% per annum. In addition we assume that (i) CISCO will not pay any dividend and (ii) there are no othe..

Develop a production plan that minimizes costs : CEO Mohan Roa expects to enter the planning period with 500 monitors in stock. Back ordering is not permitted (meaning, for example, that monitors produced in the second month cannot be used to cover first month's demand). Develop a production pla..

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