You are stock price analyst for the company. You are given historical daily stock pricesof your company from Day 1 to Day 700 (Assuming stock market trade daily). As-suming the stock price follows the Black-Scholes fråmework. Determine the historicalannual volatility, ở of this stock. Next, estimate the expected annual rate of return &.Assuming this is non-dividend paying stock, simulate the daily stock price for the next90 days with the estimated annual volatility, ô and expected annual rate of return, ôt.Then, simulate the daily stock price again for the next 90 days with 5%, 15%, 25% and35% deviation of your estimated annual volatility (assuming no change in the estimatedrate of return).

Given : You are stock price analyst for the company. You are given historical daily stock prices of…

Answered: You are stock price analyst for the…

Intermediate Algebra

19th Edition

ISBN:9780998625720

Author:Lynn Marecek

Publisher:Lynn Marecek

Chapter10: Exponential And Logarithmic Functions

Section: Chapter Questions

Problem 442RE: Jerome invests $18,000 at age 17. He hopes the investments will be worth $30,000 when he turns 26....

See similar textbooks

Similar questions

if changing market condition cause a company earning 8000000 in 2005 to project a loss of 2 percent of its profit in each of the next 5 year ,what profit does in project in 2010
Straight-line DepreciationBook value is the value of an asset that a company uses to create its balance sheet.Some companies depreciate their assets using straight-line depreciation so that thevalue of the asset declines by a fixed amount each year. The amount of the declinedepends on the useful life that the company assigns to the asset. Suppose that acompany just purchased a fleet of new cars for its sales force at a cost of $31,500 percar. The company chooses to depreciate each vehicle using the straight-line methodover 7 years. This means that each car will depreciate by +31,500 7 = +4500 per year.(a) Write a linear function that expresses the book value V of each car as a functionof its age, x.(b) Graph the linear function.(c) What is the book value of each car after 3 years?(d) Interpret the slope.(e) When will the book value of each car be $9000?[Hint: Solve the equation V1x2 = 9000.]
Trevor Harty, an avid mountain biker, always wanted to start a business selling top-of-the-line mountain bikes and other outdoor supplies. A little over 6 years ago, he and a silent partner opened a store called Hale and Harty Trail Bikes and Supplies. Growth was rapid in the first 2 years, but since that time, growth in sales has slowed a bit, as expected. The quarterly sales (in $1,000s) for the past 4 years are shown in the table below: Year 1 Year 2 Year 3 Year 4 Quarter 1 274 282 282 296 Quarter 2 182 198 185 210 Quarter 3 132 138 336 160 Quarter 4 163 169 172 188 • Develop a trend line using the data in the table. Use this to forecast sales for each quarter of year 5. What does the slope of this line indicate? • Use the multiplicative decomposition model to incorporate both trend and seasonal components into the forecast. What does the slope of this line indicate? • Compare the slope of the trend line in part a to the slope in the trend line for the decomposition model that was…
An electronics company had sales of $25,000,000 in the year just completed. Sales are expected to decline by 3% per year for the next three years un�l new drugs, now under development, receive regulatory approval. Then sales should grow at 7% per year for the next four years. What are the expected sales for the final year of the seven-year period? [
If the expected return on the market is 8% and the risk free rate is 4% and the expected return is 12%, what is the market risk premium ?
An Investor buys three shares of XYZ at the beginning of 2018, buys another two shares at the beginning of 2019, sells one share at the beginning of 2020, and sells all four remaining shares at the beginning of 2021. a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Round your year-by-year rates of return and final answers to 2 decimal places. Do not round other calculations.) Answer is complete and correct. Arithmetic average rate of return Geometric average rate of retum 4.94 % 2.92 % b. What is the dollar-weighted rate of return? (Hint. Carefully prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2018, to January 1, 2021. If your calculator cannot calculate internal rate of return, you will have to use trial and error.) (Round your answer to 4 decimal places. Negative amount should be indicated by a minus sign.) Answer is complete but not entirely correct. Dollar-weighted rate of…
A five-year project requires an investment of -112 and has the following cash flows in years 1 through 5, respectively (all cash flows in dollars): 48, 88, 34, 15, and 52. Find the difference between the Cauchy upper bound and the Cauchy lower bound. Write your answer as a percentage with two decimals; e.g., 23.55% but do not write the % sign. (Acceptable error = 0.50%)
Can i have a worked example please. Thanks!
Airodyne Wind, Inc., has wind tunnels that can operate vertically or horizontally for evaluating the effects of air flow on a component's PCB response and reliability. The company expects to build a new tunnel that will be outfitted with multiple sensor ports. For the estimates below, calculate the equivalent annual cost of the project. First Cost Replacement Cost, Year 2 AOC per Year Salvage Value Life, Years Interest Rate The equivalent annual cost of the project is $ $-250,000 $-330,000 $-940,000 $280,000 5 11%
E-Tech Financial indexed fund was tumbling by 10.5% (per annum) such that: where A0 is the (unknown) initially invested amount and t is the time of investment in years. Anticipating the falling trend to last much longer, a skeptical investor decides to withdraw completely should the initial investment drop by a third. Determine how long this investor should wait before implementing his investment plan? (Round to the nearest month) Please dont provide answer in image format thank you
The table below shows the value of the ftse 100 share index over 6 month periods for 2 years. January 2017 - £7147 July 2017. - £7455 January 2018 - £7692 July 2018 - £7668 January 2019 - £7154 If the value of shares held in the ftse 100 was £2450 in July 2017, what would it be in July 2018
Q5) A project that will cost $50,000 today, $100,000 in two years from today and $150,000 in five years from today will yield net returns of $5,000 monthly for 10 years. If the cost of money is 9% compounded annually, find the NPV of the project. (16.2)

SEE MORE QUESTIONS

Recommended textbooks for you

Intermediate Algebra

Algebra

ISBN:

9780998625720

Author:

Lynn Marecek

Publisher:

OpenStax College

College Algebra

Algebra

ISBN:

9781305115545

Author:

James Stewart, Lothar Redlin, Saleem Watson

Publisher:

Cengage Learning

Intermediate Algebra

Algebra

ISBN:

9781285195728

Author:

Jerome E. Kaufmann, Karen L. Schwitters

Publisher:

Cengage Learning

Intermediate Algebra

Algebra

ISBN:

9780998625720

Author:

Lynn Marecek

Publisher:

OpenStax College

College Algebra

Algebra

ISBN:

9781305115545

Author:

James Stewart, Lothar Redlin, Saleem Watson

Publisher:

Cengage Learning

Intermediate Algebra

Algebra

ISBN:

9781285195728

Author:

Jerome E. Kaufmann, Karen L. Schwitters

Publisher:

Cengage Learning

Algebra for College Students

Algebra

ISBN:

9781285195780

Author:

Jerome E. Kaufmann, Karen L. Schwitters

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS