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The current stock price of IOU is $250 and has a standard deviation of 35% per year. The risk-free interest rate is 5% per year compounded continuously. Find the prices of a call and a put which have an exercise price of $270 and expire in four months.
Banana Computer has a perpetual, convertible 7% annual coupon bond outstanding. The bond has a face value of $1,000 and has a conversion price of $40. The required return on an otherwise identical nonconvertible bond is 8%. Banana will never pay dividends and its current stock price is $20.
a. What is the straight value of the convertible bond?
b. What is its conversion value?
c. If Banana's stock price were to grow at 10% per year forever, how long would it take for the bond's conversion value to exceed the bond price?
d. When should the bondholder convert? Why?
The Investment Committee is big on active management, and believes that there are areas/pockets of inefficiencies in the market. Knowing that you have taken Finance 455 at X-Univer
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How can I calculate 10-day 99% VaR for portfolio comprising two banks by using the Historical Simulation Approach ?
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Question: (a) Explain the term Risk assessment and outline the provision of the Occupational Safety and Health Act 2005 with respect to risk assessment. (b) Risk Assessment
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