18.20. Suppose that 100 billion equity asset are the subject of portfolio insurance schemes.sume that the schemes are designed to provide insurance against the value of the assetdeclining by more than 5% within a year. If r = 0.06, ở = 0.25, and q = 0.03. Calculateche value of the stock or future contract that the administrator of the portfolio insuranceschemes will attempt to sell if the market falls by 23% in a single day?

The provided information is as follows: S0=100T=1r=0.06σ=0.25q=0.03 It is considered that the…

Answered: 18.20. Suppose that 100 billion equity…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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13
4) Suppose that the spot TL/S exchange rate on March 19, 2003 was TL1,300,000/S, whereas the interest rate on dollar and TL deposits were 0.05 (or 5%) and 0.68 (or 68%) per year, respectively. If one kilogram of apples that cost TL 650,000 increased to TL 1.19 million one year later, calculate the real rate of return on S deposits in terms of apples.
F2.
6. At what interest rate will a principal of P9,500 accumulate to P15,000 in 2 years compounded semi-annually?
Q7. You are given that for a special fully discrete 5-year deferred whole life insurance of 100,000 on (40), the death benefit during the 5-year deferral period is the return of benefit premiums paid without interest. Annual benefit premiums are payable only during the deferral period while the mortality follows the Illustrative Life Table, you are also provided that i = 0.06 and (IA) ₁ — = 0.04042. 1 40:51 Find the annual benefit premium.
4. Adai LLC owns 70% of the share capital of Loyal LLC. The inventories of Loyal LLC on 31 December2018 include goods bought from Adai LLC for OMR 105,000. These goods had cost Adai LLC OMR90,000. A. Explain how these goods should be dealt with in the consolidated statement of financialposition at 31 December 2018. B. Critically discuss Unrealized profits as per IFRS10 and what will happen if IFRS 10 is notfollowed with examples.
40. By the condition of a will, the sum of P 1.500 is left to a boy to be held in trust by her guardian until it amounts to P 24,000, when will the boy receive the money if the fund is invested at 7% compounded semi-annually? A. 42.298 years B. 41.298 years C. 40.298 years D. 39.298 years
7. An investor has a choice of investing a sum of money using two investment plans. For Plan 1, he invests his money at 4% compounded annually; for Plan 2, he invests his money at 3.75% semi-annually. a. Which of the two plans is more favorable to the investor? b. If the investor chooses Plan 1, after how many years will the initial sum be increased by 50%? c. Suppose that the investor starts with an initial sum of € 30 000 and that he follows Plan 1. Write down a function equation to calculate the one-year interest earned at the end of year t. For the subsequent questions, suppose the investor follows a plan to invest € 10 000, such that the interest function at the end of year t is given by I(t) = 10 000-0.076-1.076-1. Every year the investor has to pay taxes on the interest he earns. If the interest is lower than € 1660, no taxes have to be paid. On the amount of interest that exceeds € 1660, 15% taxes is due. d. For how many years does the investor pay no taxes? e. After how many…
4. Suppose that you would like to set up a scholarship. The fund that you set up will grow with an interest rate of 5% per year, compounded annually. Each year, you plan to pay out $20, 000 to a deserving student. you plan for this scholarship to be given out for a total of 5 do If years, how much money you need to initially invest?
Why would a company issue 100-year bond or hold 100-year debt as both CN and CP do? O Investors might view the ultra-long duration as a way to lock-in to a long-term positive return, even if a small one. O Issuing ultra-long debt may allow companies to 'lock-in' interest rates while they are at low levels. O All of the above may lead a company to consider and issue what's been termed 'century bonds' or 100 year bonds. O Such a lengthy term can instill confidence in the bond market that the company will be around for another century.
2. (2 pts) At an effective annual interest rate i, you are given: (a) the present value of an annuity-immediate with annual payments of 1 for n years is 40; and (b) the present value of an annuity-immediate with annual payments of 1 for 3n years is 70. Calculate the accumulated value of an annuity-immediate with annual payments of 1 for 2n years. Solution:
4. An insurer issues a 15-year annual premium-due endowment insurance of $100,000 benefit to life (50). The insurer charges an initial expenses of $ 1000 plus renewal expenses of 5% of each subsequent premium after the first premium payment. The premiums are made at the beginning of each year when (50) remains alive before reaching 70 and the benefit is paid at the end of K50 +1 years or when the person reaches the age 70 whichever occurs earlier. (a) Write down the gross future loss random variable L in terms of actuarial notations. (b) Calculate the gross premium-due G by using the Standard Select Survival Model with 5 % per year interest (Table D4) and the equivalence premium principle. 8 (c) Calculate the gross premium policy value V by using the equivalence premium G found in (b).

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