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Questions -
Q1. The price of XYZ stock, which pays no dividends, is $53.34 and the strike price of a two year European put option is $59.82. The risk-free rate is 3.42% (continuously compounded). Which of the following is a lower bound for the option such that there are arbitrage opportunities if the price is below the lower bound and no arbitrage opportunities if it is above the lower bound?
Q2. The price of a European call option on Printonics, a non-dividend-paying stock, with a strike price of $47.77 is $7.49. The Printonics stock price is $50.41, the continuously compounded risk-free rate (all maturities) is 4.81% and the time to maturity is one year. What is the price of a one-year European put option on Printonics with a strike price of $47.77?
Q3. The price of ABC stock, which pays no dividends, is $86.51 and the strike price of a one year European call option on the stock is $81.03. The risk-free rate is 4.76% (continuously compounded). Which of the following is a lower bound for the option such that there are arbitrage opportunities if the price is below the lower bound and no arbitrage opportunities if it is above the lower bound?
Q4. The price of a European call option on Furnituria with a strike price of $128.68 is $11.39. The stock price is $129.55, the continuously compounded risk-free rate (all maturities) is 4.97% and the time to maturity is one year. A dividend of $1.80 is expected to be paid by Furnituria in six months. What is the price of a one-year European put option on Furnituria with a strike price of $128.68?
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On October 29, 2013, Miss Joan Seely (SSN 123-45-6789) sells her principal residence for $150,000 cash. she purchased the residence on May 12, 2004, for $85,000. She spent $12,000 for captital improvements in 2004. To help sell the house, she pays $3..
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What is the applicable discount rate for a period of one quarter? Today is November15, 2020. U.S.-based company Hamburgler Lukewarm pays 4 equal quarterly
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Prepare the journal entry to record this transaction by Killarny Enterprises, if the company's stock is not publicly traded and the land has an appraised value of $110,000 - Prepare the journal entries for two transactions by Killarny Enterprises.
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