The option is currently a.) In-the-money b.) At-the-money c.) Out-the-money 2.) In/At/Out- the money by _____ pesos. 3.) What is the Intrinsic Value
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1.) The option is currently
a.) In-the-money
b.) At-the-money
c.) Out-the-money
2.) In/At/Out- the money by _____ pesos.
3.) What is the Intrinsic Value
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Solved in 3 steps
- Sheet 5 Use Sheet 5 to complete the following Date AMZN Return BAC Return Market Return Risk-Free Return AMZN Excess Return* BAC Excess Return* Market Excess Return* 3/1/2017 0.05 -0.04 0.04 0.0050 0.04 -0.05 0.03 4/1/2017 0.04 -0.01 0.00 0.0050 0.04 -0.02 -0.01 5/1/2017 0.08 -0.04 0.01 0.0050 0.07 -0.04 0.00 6/1/2017 -0.03 0.08 0.01 0.0050 -0.03 0.08 0.01 7/1/2017 0.02 -0.01 0.00 0.0050 0.02 -0.01 0.00 8/1/2017 -0.01 -0.01 0.02 0.0050 -0.01 -0.01 0.01 9/1/2017 -0.02 0.06 0.00 0.0050 -0.02 0.06 0.00 10/1/2017 0.15 0.08 0.02 0.0050 0.14 0.08 0.01 11/1/2017 0.06 0.03 0.02 0.0050 0.06 0.02 0.02 12/1/2017 -0.01 0.05 0.03 0.0050 -0.01 0.04 0.02 1/1/2018 0.24 0.08 0.01 0.0050 0.24 0.08 0.00 2/1/2018 0.04 0.00 0.06 0.0050 0.04 0.00 0.05…Sheet 5 Use Sheet 5 to complete the following Date GOOG Return NFLX Return Market Return Risk-Free Return GOOG Excess Return* NFLX Excess Return* Market Excess Return* 3/1/2017 0.7700 4.0000 3.7200 0.0050 0.2700 3.5000 3.2200 4/1/2017 9.2100 2.9700 -0.0400 0.0050 8.7100 2.4700 -0.5400 5/1/2017 6.5000 7.1400 0.9100 0.0050 6.0000 6.6400 0.4100 6/1/2017 -5.8200 -8.3800 1.1600 0.0050 -6.3200 -8.8800 0.6600 7/1/2017 2.4000 21.5800 0.4800 0.0050 1.9000 21.0800 -0.0200 8/1/2017 0.9500 -3.8300 1.9300 0.0050 0.4500 -4.3300 1.4300 9/1/2017 2.1100 3.8000 0.0500 0.0050 1.6100 3.3000 -0.4500 10/1/2017 6.0000 8.3200 1.9300 0.0050 5.5000 7.8200 1.4300 11/1/2017 0.4700 -4.5100 2.2200 0.0050 -0.0300 -5.0100 1.7200 12/1/2017 2.4500 2.3400 2.8100 0.0050 1.9500 1.8400 2.3100 1/1/2018 11.8100 40.8100 0.9800 0.0050 11.3100 40.3100 0.4800 2/1/2018 -5.5700 7.8000 5.6200 0.0050 -6.0700 7.3000 5.1200 3/1/2018 -6.6000 1.3600 -3.8900 0.0050 -7.1000 0.8600…Based on Table 3, what is the liquidity risk premium? Table 3 Investment 1 2 3 4 5 O 1.25% O 1.50% O 0.25% O 1.12% Maturity 2 2 7 8 8 Liquidity High Low Low High Low Default Risk Low Low Low Low High Interest Rate 1.00% 1.25% 2.25% 2.93% 4.43%
- Bond Current Price Modified Duration A 895.57 4.12257 B 625.95 7.3523 C 884.17 4.04855 Interest rate has increase by 10 basis point calculate by how much the portfolio value will change.QUESTION 1 Find the missing data Coupon Rate Maturity Date Settlement Date Price Yield 3.75% 3/28/2028 9/27/2023 3.6750%INV3 P1b Bond # 1 2 3 4 1 - year strip bond 2- year strip bond 2-year 6% coupon bond 2-year 7% coupon bond Purchase Price for the bond) 950 ? ? ? Year 1 cash flow 1000 0 60 70 Year 2 cash flow 0 1000 1060 1070 Yield to Maturity ? ? 5.50% ? If the expectations theory of the yield curve is correct, what is the market expectation of the price that bond #3 will sell for next year?
- What equation was used to get the Aftertax Cost of Debt? Debt Face Value 1000 Bond Price 1271.59 Coupon Payment 75 Maturity 50 Yield to Maturity 11.64% Aftertax Cost of Debt 9.31%What is the value of B8? A Bond Valuation 1 2 Time to Maturity (Periods) 3 Coupon Rate 4 Required Return 5 Frequency 6 Face Value 7 8 Invoice Price 9 An O$741.01 $1,000.00 O $1,008.33 $735.08 B 15 2/3 5.00% 10.00% 2 $ 1,000 ? CINV3 P2a Independent Case A Your observations of the bond market have highlighted the following bond prices, as shown in the table below. All the bonds have $1000 face value, pay coupons annually and all have the same calendar day of maturity (which was yesterday) with differing numbers of years remaining. Description Current price ($) 1-year 2% coupon 975 2-year 4% coupon 1000 3-year 6% coupon 1100 Estimate the term structure for the next three years (i.e., spot rate for the first year, and the forward rates for the second and third years), assuming the pure expectations hypothesis (PEH) holds.
- Bond Maturity Liquidity Default Risk YTM A2 High Low 3.50% B 2 High High 4.50% C8 High Low 5.50% D8 Low High 7.00% Based on the table above, what is the liquidity risk premium? 0.5% 1% 2%INV3 P1c Bond # 1 2 3 4 1 - year strip bond 2- year strip bond 2-year 6% coupon bond 2-year 7% coupon bond Purchase Price for the bond) 950 ? ? ? Year 1 cash flow 1000 0 60 70 Year 2 cash flow 0 1000 1060 1070 Yield to Maturity ? ? 5.50% ? If the liquidity preference theory is correct and you believe that the liquidity premium is 1 percent, what is the market expectation of the price that bond #4 will sell for next year?SENSAHESARINA 15 QUESTION 3 If you paid $1,195 for a 10-year bond that pays 7% coupon interest annually, what is the expected rate of return (yield to maturity)? Please provide the following: PV= rate= nper PMT= FV=