What is the implied volatility of the market index

Assignment Help Finance Basics

Reference no: EM131453903

Question: Consider a structured security of the following type: The purchaser invests $1,000 and in three years gets back the initial investment plus 95% of the increase in a market index whose current price is 100. The interest rate is 6% per year, continuously compounded. Assuming the security is fairly priced, what is the implied volatility of the market index?

Reference no: EM131453903

Questions Cloud

Define vba function mod : In section we designed a macro which calculates the value of p using Monte Carlo and which updates the screen every iteration.

What is after-tax cost of capital for this debt financing : What is the after-tax cost of capital for this debt financing?

Summarize your findings in a five-page pape : Provide a well-formulated thesis statement in your introduction paragraph. Summarize your findings in a five-page paper using proper APA formatting.

Discuss the benefit of incorporating spirituality in therapy : Discuss the benefits of incorporating Spirituality in therapy with clients. What is your personal understanding of you own spiritual and religious beliefs?

What is the implied volatility of the market index : Consider a structured security of the following type: The purchaser invests $1,000 and in three years gets back the initial investment plus 95% of the increase.

Summarize the business research project or article : Summarize the business research project or article. Identify those parties involved in the research that could face injury. What injuries might occur?

What is the value of your investment : If this fund sells at a 10 percent discount to NAV the day after the initial public offering, what is the value of your investment?

How many shares are outstanding : If the quoted share price for this closed-end fund is $13.33, how many shares are outstanding?

What is before-tax cost of capital for this debt financing : The net proceeds (proceeds after flotation costs) are $981 for each $1,000 bond. What is the before-tax cost of capital for this debt financing

Reviews

Write a Review

Required(*) Message

Finance Basics Questions & Answers

Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

User Account

All Pages