A stock is traded at $115 and the risk-free interest rate is 10% per annum with continuous

Fantastic news! We've Found the answer you've been seeking!

Question:

A stock is traded at $115 and the risk-free interest rate is 10% per annum with continuous compounding. In a risk-neutral world, what is the expected value of the stock price one year later?(Please round your answer to 4thdecimal number)

Related Book For answer-question

Financial reporting, financial statement analysis and valuation a strategic perspective

ISBN: 978-0324789416

7th Edition

Authors: James M Wahlen, Stephen P Baginskl, Mark T Bradshaw

See More Books

Posted Date: May 11, 2024 01:32 PM

See More Questions

13. What is a lower bound for the price of 3-month call option on a non- dividend-paying stock when the stock price is $50, the strike price is $45, and the 3-month risk-free interest rate is 8%?...
The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
KYC's stock price can go up by 15 percent every year, or down by 10 percent. Both outcomes are equally likely. The risk free rate is 5 percent, and the current stock price of KYC is 100. (a) Price a...
Tim plays a computer game. Each game is a win or a loss. He wins three fifths of his first 40 games. He then wins his next 12 games. For all 52 games, Required: work out the ratio wins: losses Give...
According to the PMI Code of Ethics and Professional Conduct, project managers need to exhibit which four behaviors?
What were the motivations for the original Glass-Steagall Act of 1933?
The Fotiades brothers own the SouviakiHat, a casual Greek restaurant, but they do not keep a full set of accounting records. However, the following information has been produced from the restaurant's...
Elliott Athletics is trying to determine its optimal capital structure, which now consists of only debt and common equity. The firm does not currently use preferred stock in its capital structure,...
Find the distance from the point to the plane. (2, 3,1), x-2y+3z = 17 The distance is (Type an exact answer, using radicals as needed.)
Solve the problem. A building 150 feet tall casts a 60 foot long shadow. If a person looks down from the top of the building, what is the measure of the angle between the end of the shadow and the...
K Given that x has a Poisson distribution with u=3, what is the probability that x=1? P(1) (Round to four decimal places as needed.)
What will be the value of Opening balance for year 6, if the Invested amount is increased from 2000 to 5000?
A portfiolio consists of two assets: Stock XYZ and the risk-free asset (T-bills). Stock XYZ has a beta of 1.2. The risk-free asset currently earns 3%. If the portfolio of the two assets has a beta of...
When does it make sense to hedge stock using futures? Under what conditions should a company hedge with futures and under what conditions should a company not hedge with futures? Under what...
You find PBB Corp's 3.1% bonds at a price quote of ($)97.7 on the finra.org The bond pays semiannually and matures 6 months from now. The bond's YTM is %. You may round your final answer to 4 decimal...
A patient with a significant accumulation of middle ear fluid would be expected to have a: A patient with a significant accumulation of middle ear fluid would be expected to have a: Type C...
Dr. Chan obtained a $15,000 demand loan at prime plus 1.5% on September 13 from the Bank of Montreal to purchase a new dental X-ray machine. Fixed payments of $700 will be deducted from the dentists...
The U.S. system leans toward a heavy education requirement mixed with practice, and the British system leans more toward a heavy experience requirement bordering on apprenticeship. Which system is...
If you were a certified accountant in your home country and wanted to practice as an auditor in another country, you would most likely not be allowed to practice. Why do these barriers to entry...
In this chapter, we discussed the personal qualifications, educational requirements, and experience requirements of different countries. Develop a matrix that includes countries down one side and the...

A stock is traded at $115 and the risk-free interest rate is 10% per annum with continuous

Question:

Expert Answer:

Financial reporting, financial statement analysis and valuation a strategic perspective

Students also viewed these finance questions