What is the expected value of the asset in a year

Assignment Help Financial Management

Reference no: EM132036461

Use excel to answer the following questions. Consider the following environment:

the current spot price of an asset is $50,

the annualized volatility is 11.5%, and

the interest rate is 3% per year r

What are the values of the parameters A and B of the corresponding lognormal distribution?

What is the expected value of the asset in a year? What is the one-year forward price of the asset based on this model?

Consider a one-year ca with a strike of $55.

What is the value of d2 and the value of d1? What is the probability that the call is exercised?

What is the discounted expected value of the sale price assuming the call is exercised optimally?

What is the discounted expected value of the purchase price assuming the call is exercised optimally?

What is the premium of this call based on the previous two questions?

Consider a one-year put with a strike of $55

What is the discounted expected sale price assuming the put is exercised optimally?

What is the discounted expected purchase price assuming the put is exercised optimally

What is the premium of this put based on the previous two questions?

Reference no: EM132036461

Questions Cloud

Discuss the pros and cons of this strategy : US government has more than $16 trillion in debt outstanding in the form of Treasury bills, notes, and bonds in 2013.

Calculate the continuously compounded forward rates : Calculate the continuously compounded forward rates for each six-month period in the five-year term structure.

How has the father figure evolved in society and hospital : How has the father figure evolved in society and hospital nvironment?

Children who are afraid of being kidnap and hurricane : An example of a treatment plan that can be use for children who are afraid of being kidnap and hurricane. Is it possible for parents to be involve?

What is the expected value of the asset in a year : What is the expected value of the asset in a year? What is the one-year forward price of the asset based on this model?

Psychological theories in the prosecution of criminals : Does a person's age impact their motivation or the chances of continuing criminal behavior?

Calculate the common size balance sheet : Calculate the common size balance sheet and the common size income statement for the company.

What is the value of operations as of given year : The bonds are currently selling at 97.5% of par. The preferred stock has a current market value of $8,000.

What would be the future value : What would be the FV of $19,378 invested now if the money remains deposited for eight years and the annual interest rate is 18 percent?

User Account

All Pages