uestionConsider three securities that will pay risk-free cash flows over the next three years and that have the current market prices shown here:This question: 10pSecurityPrice Today ($) Cash Flow inCash Flow inCash Flow inTwo Years ($) Three Years ($)NameOne Year ($)B1$92.42100B2$84.32100B3$382.92500Calculate the no-arbitrage price, or the price that eliminates any arbitrage opportunities, of a new security, B4, that pays risk-free cash flows of $500 in one year and $1,000 in three years.The current no-arbitrage price of Security B4 is:(round your answer to two decimal places)O Timetv9MacBook AirDDDIIF10F9F8888F780F6F5F4F3escF2F1&* OC

For $ 100 cash flow received in one year, the price is $ 92.42 For $500 Cash flow, the price…

Consider three securities that will pay risk-free cash flows over the next three years and that have the current market prices shown here: Security Name Price Today ($) Cash Flow in Cash Flow in Cash Flow in One Year ($) Two Years ($) Three Years ($) B1 $92.42 100 B2 $84.32 100 500 B3 $382.92 Calculate the no-arbitrage price, or the price that eliminates any arbitrage opportunities, of a new security, B4, that pays risk-free cash flows of $500 in one year and $1,000 in three years. The current no-arbitrage price of Security B4 is:

Consider three securities that will pay risk-free cash flows over the next three years and that have the current market prices shown here: Security Name Price Today ($) Cash Flow in Cash Flow in Cash Flow in One Year ($) Two Years ($) Three Years ($) B1 $92.42 100 B2 $84.32 100 500 B3 $382.92 Calculate the no-arbitrage price, or the price that eliminates any arbitrage opportunities, of a new security, B4, that pays risk-free cash flows of $500 in one year and $1,000 in three years. The current no-arbitrage price of Security B4 is:

Fundamentals of Financial Management (MindTap Course List)

15th Edition

ISBN:9781337395250

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter8: Risk And Rates Of Return

Section: Chapter Questions

Problem 22SP

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