9. Consider the following information:C$4.75$3$50$50XS, = C-P+(1+r)'So6.00%t6 monthsFill in the following chart.Stock Price at Option Expiration$0$50$100Cash in or out from CallCash in or out from PutCash in or out from LoanCash in or out from StockTotal

Put-call parity is a mathematical equation that establishes a key relationship between a call &…

|| 9. Consider the following information: C P So X r t || = || || || $4.75 $3 $50 $50 6.00% 6 months S=C-P+ Fill in the following chart. Cash in or out from Call Cash in or out from Put Cash in or out from Loan Cash in or out from Stock Total X (1+r)' Stock Price at Option Expiration $0 $50 $100

|| 9. Consider the following information: C P So X r t || = || || || $4.75 $3 $50 $50 6.00% 6 months S=C-P+ Fill in the following chart. Cash in or out from Call Cash in or out from Put Cash in or out from Loan Cash in or out from Stock Total X (1+r)' Stock Price at Option Expiration $0 $50 $100

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

What is the most you should be willing to pay for the stock in the table? Expected Expected Price in 1Dividend in 1 year Required Current Return Price Year $376.29 $3.91 5.80% $89.00
D0 = $2, g = 5%, P0 = $30, find the stock return 10% 11% 12% 13%
Margin %: Your margin account requires an initial margin of 50%, and a maintenance margin of 30%. You deposit $83,000 cash in a brokerage account and purchase stocks using all available margin and borrowing the rest from your broker. Later, the value of your stock holdings rises to $184,000. What is your percent return? O. 100.00% O. 10.84% O. 121.69% O. 21.69%
EXCEL PROJECT AND EXCEL SOLUTION Consider the following stocks, all of which will pay a liquidating dividend in a year and nothing in the interim: Stock A Stock B Stock с Stock D Market Capitalization (5 million) 800 750 950 900 Expected Liquidating Dividend ($ million) 1000 1000 1000 1000 Beta PLEASE SHOW SOLUTIONS IN EXCEL 0.77 1.46 1.25 1.07 a. Calculate the expected return of each stock. b. What is the sign of correlation between the expected return and market capitalization of the stocks? In Problem 20, assume the risk-free rate is 3% and the market risk premium is 7%. a. What does the CAPM predict the expected return for each stock should be? b. Clearly, the CAPM predictions are not equal to the actual expected returns, so the CAPM does not hold. You decide to investigate this further. To see what kind of mistakes the CAPM is making, you decide to regress the actual expected return onto the expected return predicted by the CAPM.49 What is the intercept and slope coefficient of…
You are evaluating a company's stock. The stock just paid a dividend of $1.75. Dividends are expected to grow at a constant rate of 5 percent for a long time into the future. The required rate of return (Rs) on the stock is 12 percent. What is the fair present value? Multiple Choice O O E $26.25 $22.50 $35.26 $50.25 Q Search $ 4 R is do F % 5 164- T 8 N 10 DII K M O O ENG D
4.StockA sells for $40 a share. Its likely dividend payout and end-of-year price depend on the state of the economy by the end of the year as follows: Probability Stock Price Boom $50 Normal economy 42 Recession 30 50% 30% 20% Dividend $2.00 1.00 0.50 a.Calculate the expected holding-period return and standard deviation of the holding period return. b.Calculate the expected return and standard deviation of a portfolio invested half in this stock and half in Treasury bills. The return on bills is 4%.
OS DIVIDENDS ($) Time Period Now End of Year 10 End of Year 20 End of Year 50 Expected Dividend's Future Value Present Value Using the orange curve (square symbols), plot the present value of each of the expected future dividends for years 10, 20, and 50. The resulting curve will illustrate how the PV of a particular dividend payment will decrease depending on how far from today the dividend is expected to be received. Note: Round each of the discounted values of the of dividends to the nearest tenth decimal place before plotting it on the graph. (Tool tip: Mouse over the points in the graph to see their coordinates.) 6.00 FV of Dividends 5.00 Discounted Dividends 4.00 3.00 2.00 1.00 0 0 10 20 20 PV of Dividends 30 40 50 60 YEARS
Q2 - Returns on stocks X and Y are listed below: Period 1 2 3 4 5 6 7Stock X 4% -2% 5% -1% 10% 7% 12%Stock Y -3% 7% 4% 2% 2% 8% -3% Consider a portfolio of 10% stock X and 90% stock Y. What is the mean of portfolio returns? Please specify your answer in decimal terms and round your answer to the nearest thousandth (e.g., enter 12.3 percent as 0.123).
A preferred stock is expected to pay a constant quarterly dividend of $1.25 per quarter into the future. The required rate of return, Rs, on the preferred stock is 13.5 percent. What is the fair value (or price) of this stock? 3 E Multiple Choice $37.04 $24.36 $52.36 $18.65 None of these choices are correct Q Search $ 4 R % 5 T * D 00 8
I need both answers
1

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