Given the following, does the law of one price hold? If not, what action should an investor take?
Answer to relevant QuestionsAssume you can lend and borrow at 10% and have $5,000 in income in each of two periods. What is your opportunity set? Assume a bond with cash flows of $100 each year and a principal payment of $1,000 in five years and a current price of $960. What is A. Its current yield? B. Its yield to maturity? Consider a bond with annual coupon payments of $100,a principal payment of $1,000 in 10 years, and a cost of $1,000. Assume a flat yield curve with a 10% yield to maturity. What is the duration of the bond? If the yield ...Assume the binomial pricing model. Assume that the share price is $50, the exercise price is $60, u = 1.2, d = 0.9, r = 1.1, and N = 10. What is the value of α? What is the call value? Here are data on five mutual funds: What is the reward-to-variability ratio and the ranking if the risk-free rate is 3%?
Post your question