Volatility for stock increases the value of option on stock

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1. What annual contribution do you need to make to your retirement fund, assuming that your retirement wealth goal is $500,000 and that you’ll earn 6 percent on your investments for the next 40 years?

2. You recieve $10,000 every 5 yrs, $2,000 every 2 yrs, $1,000 every year and $500 per month for the next 100 years. Find Present Worth for this cash flow if the interest rate is 24%. clearly show the factors used to solve problem. Interest compounded anually.

3. Explain why an increase in volatility for a stock increases the value of an option on the stock.

Reference no: EM131913878

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