Stock in the one-period binomial model

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1. A note dated July 1, 2013, promises to pay $8000 with interest at 7% compounded quarterly on January 1, 2022. Find the proceeds from the sale of the note on July 1, 2017, if money is worth 8% compounded semi-annually.

2. Seven years and two months after its date of issue, an 11-year promissary note for $8200 bearing interest at 13.5% compounded monthly is discounted at 10.5% compounded semi-annually. Find the proceds of the note.

3. A stock in the one-period binomial model such that S0=4 S1(H)=8 S1(T)=2 and r=0.25

Give the price of both a 1-period strike-$6 call Cand a 1-period strike-$6 put P. What do you notice about the quantity.

Reference no: EM131948725

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