User Account

All Pages

Probability of a negative balance

Assignment Help Finance Basics
Reference no: EM131082683

A company's cash position (measured in millions of dollars) follows a generalized Wiener process falling on average $0.2m per quarter with volatility of $1.3m per quarter. How high must the initial cash balance be for the probability of a negative balance after 1.75 years not to exceed5%?

a) $7.057m

b) $3.179m

c) $6.007m

d) $7.557m

e) None of the above.

Reference no: EM131082683

Questions Cloud

Dupont framework : Assume the following: Sales = $400M; Net Income = $60M; TA = $350M; and there is $0.50 in total debt per dollar of total equity. According to the DuPont framework, ROE would be approximately_______?
How does one become civically engaged globally : How does one do citizenship globally? How does one become civically engaged globally? Students will identify a topic important to themselves as individuals, to their family, or to their community and involve themselves in the global community.
Why did global green books publishing struggle : Why did Global Green Books Publishing struggle - what were the specific solutions that were introduced by Samantha that worked?
Use a d-optimal algorithm to find a design : Use a D-optimal algorithm to find a design.
Probability of a negative balance : A company's cash position (measured in millions of dollars) follows a generalized Wiener process falling on average $0.2m per quarter with volatility of $1.3m per quarter. How high must the initial cash balance be for the probability of a negative..
Define two types and describe how they form in atmosphere : There are two types of winds, geostrophic and gradient. Define these two types and describe how they form in the atmosphere.
What type of design did the experimenters use : What type of design did the experimenters use
What is the resulting percent change in number of gallons : Now express the answer to Step 3 in terms of percentages: What is the percent change in price, Δp/p, when it increases from $3.50 to $4.00 per gallon? What is the resulting percent change in the number of gallons sold ΔD/D
What are the physical challenges and cognitive challenges : what are the physical challenges, cognitive challenges and social challenges for that stage of development and how can those challenges be met? If you pick adolescence, what are the physical challenges, cognitive challenges and social challenges f..

Reviews

Write a Review

Finance Basics Questions & Answers

  An inheritance offers the amount of 100 in one year but

what amount comes closest to the future value at the end of year 20 of a 15 year annuity of 550 that makes its first

  Loan being offered by regions best at 86 apr for 5 years

the company needs to finance 8000000 for a new factory in mexico. the funds will be obtained through a commercial loan

  Changes in retained earnings

The statement of changes in retained earnings for the year shows:

  Calculate what you consider should be the market value of sh

Today is 30th June 2015. Justin Beamer Limited has distributable earnings of $6.00 per share. The company considers that it has a choice between: i) Distribute these earnings as dividends, in which case it will be able to maintain this annual dividen..

  Computation of weighted average cost of capital

Computation of weighted average cost of capital and construct a pro forma balance sheet that indicates the firm's optimal capital structure

  What is the present value of this investment

You win a scratch off lottery ticket that promises to pay an initial payment of 10,000 this year and grow at a rate of 5% forever. If the discount rate is 8%, what is the present value of this investment?

  What amount should be used as the initial cash flow

The company now wants to build a new retail store on the site. The building cost is estimated at $1,250,000. What amount should be used as the initial cash flow for this building project?

  Question regarding the project operating cash flow

Interest expense 4 million. The company faces a 35% tax rate. What is the project's operating cash flow for the first year (t = 1)? Write out your answer completely. For example, 2 million should be entered as 2,000,000.

  Morningside nursing home not-for-profit corporation its tax

morningside nursing home a not-for-profit corporationnbsp its tax exempt debt currently requires an interest rate of

  Define short rate-spot rate

Define short rate, spot rate, forward rate, and yield to maturity. If the expectations hypothesis holds, how should these rates be related?

  How much should the investor be willing to pay for this bond

The bond issue in question has a par value of $1,000 and 7 years to maturity. How much should the investor be willing to pay for this bond?

  Use the rounded numbers in intermediate calculations

Solve for the unknown number of years in each of the following (Enter rounded answers as directed, but do not use the rounded numbers in intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16)).

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd