Different models to predict the financial failure

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Reference no: EM131902255

1. What is the value of a 9-month call with a strike price of $35 given the Black-Scholes option pricing model and the following information? Stock price $37 Risk-free rate 5 percent Standard deviation 44 percent N(d1) .668136 N(d2) .521421

? $7.14 ? $26.69 ? $18.20 ? $10.92 ? $31.54.

2. What is the return for the year on a bond with a par value of $1000 and a coupon rate of 8.5% if it price at the beginning of the year was $1215 and its price at the end of the year was $1020? Assume that interest is paid annually.

3. Demonstrate familiarity with the causes and effects of financial failure and different models to predict the financial failure.?

Reference no: EM131902255

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