Business, 14.05.2021 02:10 officialrogerfp3gf2s
A stock price (which pays no dividends) is $48 and the strike price of a two year European put option is $54. The risk-free rate is 3% (continuously compounded). Which of the following is a lower bound for the option such that there are arbitrage opportunities if the price is below the lower bound and no arbitrage opportunities if it is above the lower bound?
A. $4.00.
B. $3.86.
C. $2.86.
D. $0.86.
Answers: 2
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Business, 22.06.2019 12:10
Bonds often pay a coupon twice a year. for the valuation of bonds that make semiannual payments, the number of periods doubles, whereas the amount of cash flow decreases by half. using the values of cash flows and number of periods, the valuation model is adjusted accordingly. assume that a $1,000,000 par value, semiannual coupon us treasury note with three years to maturity has a coupon rate of 3%. the yield to maturity (ytm) of the bond is 7.70%. using this information and ignoring the other costs involved, calculate the value of the treasury note:
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Business, 22.06.2019 13:10
Paid-in-capital in excess of par represents the amount of proceeds a. from the original sale of common stock b. in excess of the par value from the original sale of common stock c. at the current market value of the common stock d. at the curent book value of the common stock
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A stock price (which pays no dividends) is $48 and the strike price of a two year European put optio...
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