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1. Assume MMM stock is trading at $180 and has a dividend rate of 1% per year. The interest rate is 2% per year and an at-the-money call option that expires in 1 year costs $1.50. Is there an arbitrage opportunity? If so, create a portfolio that always pays off at least $1,000,000.
2. Assume the dividend rate is 3% and there’s an at-the-money put expiring in 2 years that costs $15. Is there an arbitrage opportunity? If so, create a portfolio that always pays off at least $1,000,000.
3. Under the same setting as problem (5) there is also an at-the-money call expiring in 2 years that costs $2. Is there an arbitrage? If so, create a portfolio that always pays off at least $1,000,000.
If a financial statement says "In millions, except share and par value amounts which are reflected in thousands and par value per share amounts," is the amount $88103 as is, or does it mean $88,103,000,000? (I'm looking at Google's current financial ..
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A taxpayer placed 7-year property in service in April 2016. This equipment cost $2,800,000. What is the amount of the 179 deduction on the equipment? What is the basis for MACRS depreciation of the equipment in 2016? How much depreciation will be tak..
Suppose Stan holds a portfolio consisting of a $10,000 investment in each of 8 different common stocks, equally. What is the portfolio's new beta?
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