Define the terms-stock split-period dividend-annual dividend

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1. Assume the risk-free rate is 5% per annum, continuously compounded. Let Bt be the price at time t ≤ 5 of a (zero-coupon) bond paying $1 at time T = 5. Let f(t, x) = (t^2)(x^4)+ x^2 . Let Yt = f(t, Bt). Compute the differential dY. (Note: you can do this without stochastic calculus)

2. GOOG is currently trading at $1039.85. Graph the payoff and profit diagram of the 1100/1120/1160 Call Broken Wing Butterfly.

3. Define the following terms, stock split, period dividend, annual dividend, value and dividend adjustment for split. Add example for clarity. Provide your definitions and explanations in clear and precise language. Include references used for content.

Reference no: EM131924747

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