A non paying dividend stock is priced at 50. Call option delta is 0.5. Stock volatility is 0.29. By using BS model, the premium of 55-strike priced European call option in 6 months is

Q: Find the present value of $800 due in the future under each of the following conditions. Do not…

A: Time value of money (TVM) refers to the method used to measure the amount of money at different…

Q: Tower City aims to construct a new bypass between two main routes that will reduce commuter travel…

A: Here, Cost of Route is $15 million Cost Saving is 17,500 people $100 per year Yearly Expense is…

Q: At what nominal rate compounded quarterly will payments of P 800 at the beginning of each 3 months…

A: Here, Quarterly Payment is P800 Time Period is 5 years Annuity Type is Annuity Due Borrowed Amount…

Q: % earned by an investor in a bond that was purchased for $944, has an annual coupon The nominal rate…

A: To calculate the realized return we will use the below formula as follows:   Nominal rate of return…

Q: The cost price of 35 pairs of sport shoes was $350 per pair. AG Sport Center plan to sell all the…

A: Mark down is effectively devaluation of a product. That is, the seller reduces the actual list price…

Q: Mr. Dalisay applied for a bank loan with a principal of P150,000 to be paid after five years in…

A: Loan amount = P150,000 Interest rate on loan = 0.06 Annual interest amount = P9,000 (i.e. P150,000 *…

Q: 16) Suppose Bank is trading share at 20$ today. The company pays dividend of 0.25. The analysts…

A: To calculate the stock price we will use the  following information   Expected return =…

Q: 1) If you deposit $4,000 today in a bank account and the interest is compounded annually at 10…

A: Time value of money (TVM) refers to the method used to measure the amount of money at different…

Q: From the given information find the Cash Flow From the Asset. Operating Cash Flow 775 Net Change in…

A: Cash flow from asset = cash flow from operation + changes in working capital + changes in fixed…

Q: a factory savings plan, a workman deposits P 25 at the beginning of each month for 4 years, and the…

A: The amount being deposited at each month and that money grow with time and interest and period of…

Q: How are the Dow Jones industrial Average and the S&P 500 index different?

A: 1. DJIA tracks the stock prices of 30  large cap US companies. 2.DJIA is a price-weighted index 3.…

Q: Which of the following four bonds has the least Macaulay duration? A bond with   A.   4.75%…

A: Macaulay duration is the weighted average of the time it takes to get cash flows from a bond and it…

Q: Mr. Dalisay applied for a bank loan with a principal of P150,000 to be paid after five years in…

A: Principal loan amount = P150,000 Loan period = 5 years Current market rate = 0.10     Principal will…

Q: How do anthropological perspectives on debt help us make sense of modern-day financial markets?

A: Whether focused on family or with kula, anthropology's attention to credit and debt stretches back…

Q: Question 2 The Penny Wheel Company is considering the following two projects, but the firm can only…

A: The question is related to Capital Budgeting. 1. The Payback period is the length of time required…

Q: 13. A discounted loan of $3,000 at a simple discount rate of 6.5% is offered to Mr. Jones. If the…

A:

Q: The future value of $2500 four years from now at 7 percent is

A: Future value for 2500 principal amount plus interest compounded for four years at the interest rate…

Q: What lessons can the fund management industry learn from the Woodford investment scandal?

A: The oversight and administration of a financial institution's cash flow is known as funds…

Q: If the risk-free rate is 2.2 percent, the inflation rate is 1.9 percent, and the market rate of…

A: The risk premium on the U.S. Treasury bond will be zero as it is backed by US government and as…

Q: Melvin availed a loan from a bank that gave him an option to pay Php 25,700 monthly for 2 years. The…

A: In this Question, we have information i.e. Melvin availed a loan from a bank and he can repay the…

Q: Sunburn Sunscreen has a zero coupon bond issue outstanding with a face value of $30,000 that matures…

A: Here, Face Value of Debt is $30,000 Current Market Value of Firm Asset is $31,800 Risk Free Rate is…

Q: Describe a situation when an investor would want to use a market order.

A: Investors are required to place order with their respective brokers for purchasing or sale of…

Q: 1.  What is the percentage change in the PV of $100 due in 1 year when the interest rate changes…

A: Time value of money (TVM) refers to the method used to measure the amount of money at different…

Q: Would you rather receive $1,000 now and $2,000 in two years or $2,500 in one year, using a 4%…

A: Present value = C0 + (C1 * (1+r)-1) + (C2*(1+r)-2) Where C0 = Cash flow year 0 C1 = Cash flow year 1…

Q: Initial investment in equipment Enitial investment in working capital $ 150,000 $ 30,000 $ 160,000 $…

A: The cash flow from the operation would be the after deduction of operating expenses and taxes and…

Q: Year Investment Cash Inflow $13,000 $10,000 $1,000 $2,000 $2,500 $4,000 $5,000 $4,000 $5,000 $4,000…

A: Payback period = initiative investment/Annual cash inflows Here cash inflows per year is not…

Q: National Co.’s stock sells for P35 that recently paid a P5 dividend. The growth rate will remain the…

A: As per formula Cost of newly issued equity = [D0*(1+g)/(P0-F)]+g Where D0 - Recent dividend i.e. P5…

Q: Which formula provides the value of this gift

A: Gift of $5,000 is to be received 6 years from today  Formula for calculating Present value  PV =…

Q: Create a plan of investment on a bank and solve its interest with respect to the rate offered and…

A: Simple interest is computed on the loan's initial main amount, but compound interest is calculated…

Q: Revenue from the sale of ergonomic hand tools was P300,000 in years 1 through 4 and P465,000 in…

A: Sales; Year 1-4 = P300,000 Year 5-9 = P465,000   Interest rate = 0.10 Period = 9 years Present value…

Q: Question 9 Abnormal earnings are O net income adjusted for a capital charge computed as the…

A: An earnings of the company are defined as the after tax the net income. Basically, they are the…

Q: ected rate of return concept differ from that of the rea

A: There are many method of valuation of stock based on expected rate and realized return and dividends…

Q: Henry purchased a stock for $45 a share, held it for one year, received a $2.34 dividend, and sold…

A: To calculate the rate of  return we will use the following formula   Rate of return = [D+(P1-P0)]/P0…

Q: Find the FUTURE VALUE in SIMPLE ANNUITY of each of the following scenarios where R is the regular…

A: Future Value of Ordinary Annuity refers to the concept which dictates the compounded value of a sum…

Q: Bond 1 matures in two years and pays an annual coupon (at the end of the year) of 1%. The face value…

A: YTM With face value (FV), present value/ price (PV), period (n) and coupon payment (C), YTM is…

Q: aving a trading system is important? And why managing our

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Q: Phillips Equipment has 6,500 bonds outstanding that are selling at 96.5 percent of par. Bonds with…

A: Weighted average cost of capital (WACC) When a firm has different sources of financing, the cost of…

Q: You decide to invest P35,000 in RX Pharmaceuticals, P35,000 in TS Banks, and P10,000 in each of the…

A: The expected return of Portfolio is calculated by multiple the expected return of each security with…

Q: Suppose the term structure of risk-free interest rates is as shown below. 2 yr Term 1 yr 3 yr 5 yr 7…

A: Given, The EAR for year 1 to 20

Q: Assume that you have been hired as a consultant by CGT, a major producer of chemicals and plastics,…

A: Weighted Average Cost of Capital is computed by using following formula: WACC=WeightEquity×Cost of…

Q: National Co.’s capital structure consists entirely of long-term liabilities and common equity. The…

A: WACC = (Ke*Wk) + (Kd*(1-t)*Wd) Where Ke  = Cost of equity Kd  = Cost of debt Wk = weight of equity…

Q: RUZTIN 204/E2I Financial Manageme Networking capital equals. O a. Current Assets minus Current…

A: Working capital is the amount required to run day to day business operation. It is also known as…

Q: b. Financial Management means planning, organizing, directing and controlling the financial…

A: Risk management refers to the process of identifying, analysing, and accepting or mitigating risk in…

Q: 12)) The price of $6050 face value commercial paper is $5900. If the annualized investment rate is…

A: Commercial paper is a form of uninsured debt security issued by firms to support payrolls, accounts…

Q: a) Let's say you invest $10,000 into each account. What is the final amount after 10 years? b) How…

A: Future Value: It represents the future worth of the present amount and is estimated by compounding…

Q: Find the future values of the following ordinary annuities. FV of $600 each 6 months for 8 years at…

A: Annuities are series of regular payments made in each period. An ordinary annuity is that annuity in…

Q: In 1999, the euro was trading at $0.82 per euro. If the euro is now trading at $0.99 per euro, what…

A: To calculate the percentage change in euro's value we will use following formula   Percentage change…

Q: discuss the motives a company may have for engaging in currency and intrest rate swaps

A: A swap is a two-party derivative transaction that includes the exchange of pre-agreed cash flows. It…

Q: The Tech company. Inc. is currently making windfall profits from the sales of financial programming…

A: "Hi, Thanks for the Question. Since you asked multiple sub parts question, as per authoring…

Q: The management of ProdPharm.inc has decided to increase the production capacity of its factory by…

A: The real interest rate is the actual rate that an investment earns taking into account the frequency…