Use the table below to calculate the premium of the call. This is a 3-year option; the present value must account for T 3. Use (1+r) for discounting. 4. Use the table below to calculate the premium of the call. This is a 3-year option; the present value must account for T=3. Use (1+r) for discounting. SO r $50 6.00% u 2 0.5 3 F3 $59.55 37.3% Strike $80.00 CALL with strike of $80.00 Outcome Ups Downs Probability 1 3 0 5.20% probability 100.00% Cumulative Underlier price $400.00 Revenue Cost from Exercise? from sale purchase Payoff Yes $400.00 $80.00 $320.00 2 2 1 26.20% 94.80% $100.00 Yes $100.00 $80.00 $20.00 3 1 2 43.98% 68.59% $25.00 No $0.00 $0.00 $0.00 4 0 3 24.61% 24.61% $6.25 No $0.00 $0.00 $0.00 Expected value $47.02 $25.13 $21.89

Two alternative courses of action have the following schedules of disbursements. If the MARR is 6% which alternative should be selected? Use present worth analysis. Show your calculations in your working document. Also note that in periods 4 and 5, the values for option B should be - 400 and - 500 respectively. Year 0 1 2345 2 3 A B -$1,300 0 0 0 0 0 $1,300 - $100 -200 -300 400 500 $1,500

Q)You are given the future value of an annuity, A, the monthly payment, R, and the annual interest rate, r. Find the number of monthly payments, n. Round your answer to the nearest whole number if necessary.A = $4000; R = $70; r = 7% Solve it correctly not use excel

What is the present discounted value of $400 to be received one year from now plus $500 to be received two years from now if the interest rate is 4%? А. $751.84 $860.05 C. $899.04 D. $912.89 B.

You are offered the choice of two payments streams A. $150 paid one year from now, and $150 paid two years from now. B. $140 paid one year from now and $164 paid two years from now. a. Which payment stream would you prefer if the interest rate is 9 percent? (Prefer Stream B/Prefer Stream A)? b. Which payment stream would you prefer if the interest rate is 12 percent? (Prefer Stream A/Prefer Stream B)?

a. Calculate the intrinsic value for each of the following call options. (Round your answers to 2 decimal places.) Company RJay RJay Sell-Mart Xenon Time to Expiration (months) RJay RJay Sell-Mart Xenon 1 2 Time to Company Expiration (months) 5 6 LO Strike 1 2 5 6 60 70 60 7.50 b. Now assume that the effective annual interest rate is 7.18%, which corresponds to a monthly interest rate of 0.58%. Calculate the present value of each call option's exercise price and the adjusted intrinsic value for each call option. (Round your answers to 2 decimal places.) Strike SO 60 70 60 7.50 62.77 62.57 67.80 6.48 Intrinsic Value SO 62.77 62.57 67.80 6.48 PV(X) Adjusted Intrinsic Value

For the following problem assume the effective 6-month interest rate is 2 %, the S-T 6-month forward price is $ 1020, and use the premiums listed below for S-T options with 6 month to expiration. Strike Call Put 950 120.405 51.777 1000 93.809 74.201 1020 84.47 1050 71.802 101.214 84.47 1107 51.873 137.167 1) Suppose you buy the S-T index for $ 1000 and buy a 950-strike put. Determine the profit for the following S-T index spot prices at expiry. When price is $ 925, the profit is $ ? When price is $ 950, the profit is $ When price is $ 975, the profit is $ When price is $ 1000, the profit is $ ? When price is $ 1025, the profit is $ ? When price is $ 1050, the profit is $ ? When price is $ 1075, the profit is $ ? When price is $ 1100, the profit is $ ? When price is $ 1125, the profit is $ ? 2) Suppose you buy a 950-strike call and invest $ 931.37 in zero-coupon bonds. Determine the profit for the following S-T index spot prices at expiry. When price is $ 925, the profit is $ When price…

Consider three alternatives A, B, and "do-nothing." (a) Construct a choice table for interest rates from 0% to 100%. Year A B 0 1-5 –$10,000 3,200 -$15,000 4,500

Suppose the € is appreciating from Spot = S($/€) = 1.1200 to F180($/€) = 1.1400.Find 180-day forward premium is given

If you are expecting to get OMR 7100 at the end of 17 years. Calculate its present value if the discount rate is 2.5% computed monthly. Select one: O a. 2643.81 O b. 4643.81 O c. None of the options O d. 5643.81 e. 7643.81