User Account

All Pages

What is the value of the derivative

Assignment Help Finance Basics
Reference no: EM132133083

A stock price is currently $20, and at the end of 3 months it will increase or decrease by 10%. The risk free rate is 5% per year (continuous compounding). Assume that ST is the price at the end of 3 months. what is the value of the derivative that pays off ln(ST) at this time?

Reference no: EM132133083

Questions Cloud

What amount is allowed as a deduction for the decline : What amount is allowed as a deduction for the decline in value of the above items purchased during the current income year using both methods available
Set up an amortization schedule : Set up an amortization schedule for a $15,000 loan to be repaid in equal installments at the end of each of the next 4 years. The interest rate is 10%.
Find the present value of the following ordinary annuities : Find the present value of the following ordinary annuities (See hint for Problems 4-9):
What is the future value : What is the future value of a 9%, 5 year annuity due that pays 300 each year?
What is the value of the derivative : Assume that ST is the price at the end of 3 months. what is the value of the derivative that pays off ln(ST) at this time?
What is the accumulated sum : What is the accumulated sum of the following stream of payments?
What is the price of a par value bond : What is the price of a $1,000 par value bond with an 8% coupon rate paid semiannually, if the bond is priced to yield 4% and it has 15 years to maturity?
Low liability insurance limits : "Many drivers operate vehicles either without insurance or with very low liability insurance limits. They often are in no position to pay for the damage
Calculate the forecasted utility cost : Blacken Company manufactures motorcycles. Using a regression program, the forecasted utility cost at 2,300 machine hours (rounded to the nearest dollar) is

Reviews

Write a Review

Finance Basics Questions & Answers

  The company paid 378 in dividends and has net working

global ventures has a return on equity of 9.8 percent a retention ratio of 60 percent and a profit margin of 4.5

  Your aunt wants to decrease at a constant amount each year

your 69-year old aunt has savings of 35000. she has made arrangements to enter a home for the aged on reaching the age

  Explain how risk affects corporate financial strategy

explain how risk affects corporate financial strategy. include the following in your answerbusiness riskcredit

  Financial analyst with ace gadgets

A senior financial analyst with Ace Gadgets (AG) is attempting to get a better grasp on sales forecasting for AG's new franchises. She has obtained various details for 27 existing franchises including (see associated spreadsheet):

  Estimating the weighted average cost of capital

What is Kellogg's total market capitalization as of December 31, 2015? Enter answer in billions, rounding to one decimal place.

  Explain the difference between the two numbers

According to the CAPM, the annualized alpha of portfolio A is 3.32% p.a. Explain the difference between the two numbers. (Note: It's not due to rounding)

  Assume that both portfolios a and b are well diversified

assume that both portfolios a and b are well diversified that era12 and erb9. if the economy has only one factor and

  Looking at the industry balance sheets

Looking at the industry Balance Sheets, suppose each company wants to increase its leverage to 3.0 by issuing bonds and purchasing plant and equipment.

  Predict two ways that the hedge fund incentive fee may

predict two ways that the hedge fund incentive fee may affect a managers proclivity to take on high-risk assets in the

  What is the optimal call policy of the issuing firm

What is the optimal call policy of the issuing firm, assuming that the firm is trying to maximize shareholder wealth? What is the value of the callable bond?

  Calculate the effective annual interest rate

Calculate the effective annual interest rate - How long (in years and months) would it take to repay the loan if, alternatively, James and Mary decide to repay

  Artman treasurer believes that the most likely value for

artman corporation owes 250 million yen to its supplier in 3 months. artman could hedge its exposure by buying call

Free Assignment Quote

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

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd