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Question
What is the price of a 2-year equity-linked CD under the following terms? No coupon is paid. At maturity the CD pays 80.0% of the S&P 500 index appreciation. The S&P 500 price = 900, div = 0.02, σ = 0.20, and interest rates are 5.0%.A) $890.22
B) $990.23
C) $1064.20
D) $1110.55
Answer
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Related questions
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Assume the following: LN(S) and LN(Q) have a correlation coefficient of -0.65, S(0) = 55, Q(0) = 60, r = 0.04, σs = 0.22 σQ = 0.15, and dividends = 0. Using formula 20.39, what is the price of a claim that pays Q/?
A) $8.16
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D) $11.16
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Assume the following: LN(S) and LN(Q) have a correlation coefficient of 0.40, S(0) = 60, Q(0) = 60, r = 0.05, σs = 0.30 σQ = 0.25, and dividend = 0. Using formula 20.39, what is the price of a claim that pays ?
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The current price of silver is $32.00 per ounce. The effective lease rate and risk free rate are 3.0% and 4.0%, respectively. If the cost to mine one ounce of silver is a constant $25.00, what is the trigger price per ounce at which the silver will be mined?
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