(a)
To calculate:
If the high water mark is
Introduction:
The Black-scholes model is used for determining the price of European call option by using the variation of price in financial instruments. This model uses stock price, option price, and time for ascertaining the call option price.

Answer to Problem 11PS
The annual incentive fee is
Explanation of Solution
Given:
The black-scholes formula is as follows:
For calculating the
Now the calculation of
The value of
Thus, the value of
Now, the calculation of
The value of
Thus, the value of
By substituting the values, value of call option is:
Thus, the value of call option is
The computation of value of incentive fee is as follows:
Thus, the annual incentive fee is
(b)
To calculate:
If the high water mark is zero and asset value is
Introduction:
The Black-scholes model is used for determining the price of European call option by using the variation of price in financial instruments. This model uses stock price, option price, and time for ascertaining the call option price.

Answer to Problem 11PS
The annual incentive fee is
Explanation of Solution
Given:
The value of X is changed to
The black-scholes formula is as follows:
For calculating the
Now the calculation of
The value of
Thus, the value of
Now, the calculation of
The value of
Thus, the value of
By substituting the values, value of call option is:
Thus, the value of call option is
The computation of value of incentive fee is as follows:
Thus, the annual incentive fee is
(c)
To calculate:
If the high water mark is zero and asset value is
Introduction:
The Black-scholes model is used for determining the price of European call option by using the variation of price in financial instruments. This model uses stock price, option price, and time for ascertaining the call option price.

Answer to Problem 11PS
The annual incentive fee is
Explanation of Solution
Given:
The black-scholes formula is as follows:
For calculating the
The value of X has been changed which is:
Now the calculation of
The value of
Thus, the value of
Now, the calculation of
The value of
Thus, the value of
By substituting the values, value of call option is:
Thus, the value of call option is
The computation of value of incentive fee is as follows:
Thus, the annual incentive fee is
(d)
To calculate:
If the high water mark is zero and asset value is
Introduction:
The Black-scholes model is used for determining the price of European call option by using the variation of price in financial instruments. This model uses stock price, option price, and time for ascertaining the call option price.

Answer to Problem 11PS
The annual incentive fee is
Explanation of Solution
Given:
The value of X is changed to
The black-scholes formula is as follows:
For calculating the
Now the calculation of
The value of
Thus, the value of
Now, the calculation of
The value of
Thus, the value of
By substituting the values, value of call option is:
Thus, the value of call option is
The computation of value of incentive fee is as follows:
Thus, the annual incentive fee is
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Chapter 26 Solutions
INVESTMENTS-CONNECT PLUS ACCESS
- see itPlease don't answer i posted blurred image mistakely. please comment below i will write values. if you answer with incorrect values i will give unhelpful confirm.arrow_forwardNo use ai. if image is blurr or data is not showing properly then dont answer i will sure deslike. please comment i will write values.arrow_forwardDon't use ai. if image is blurr or data is not showing properly then dont answer i will sure deslike. please comment i will write values.arrow_forward
- no ai Please don't answer i posted blurred image mistakely. please comment below i will write values. if you answer with incorrect values i will give unhelpful confirm.arrow_forwardFinance SubjPlease don't answer i posted blurred image mistakely. please comment below i will write values. if you answer with incorrect values i will give unhelpful confirm.arrow_forwardcalculate ratios for the financial statment given and show all working manually: 3. TIE Ratio 4. Cash Coverage Ratioarrow_forward
- calculate ratios for the financial statment given and show all working manually: 1. Debt Ratios 2. Debt to Equityarrow_forwardcalculate the following ratios for the statements and show all working: 1. Current Ratios 2. Quick Ratio 3. Cash Ratioarrow_forwardDont solve this question with incorrect values. i will give unhelpful . do not solvearrow_forward
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