You want to sell an instrument which pays $1,000,000 if the price STof stock ZZ at the

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

Question:

You want to sell an instrument which pays $1,000,000 if the price STof stock ZZ at the future time T is above the level X, and pays zero otherwise.

What is the price of this instrument?

Related Book For answer-question

Income Tax Fundamentals 2013

ISBN: 9781285586618

31st Edition

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

See More Books

Posted Date: May 02, 2023 04:18 AM

See More Questions

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...
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
A 50 coaxial cable is connected to an 80 resistive load and a dc source with zero internal resistance. Calculate the voltage reflection coefficients at the source and at the load.
The bricks on top of the beam and the supports at the bottom create the distributed loading shown in the second figure. Determine the required intensity w and dimension d of the right support so that...
Pablo Management has seven employees, each of whom earns $130 per day. They are paid on Fridays for work completed Monday through Friday of the same week. Near year-end, the seven employees worked...
Which of the following is most crucial to a purchasing department? a. Authorizing the acquisition of goods. b. Assuring the quality of goods acquired. c. Verifying the propriety of goods acquired. d....
The Ajax Corporation has the following set of projects available to it: *Note: All projects have equal risk. Ajax can raise funds with the following marginal costs: First $250 million..............
A 4.20 kg block is attached to a spring with spring constant 2140 N/m. The block is resting on a horizontal, frictionless surface. It is pulled 4.20 cm from the equilibrium position and given an...
Leisure City maintains a Pension Trust Fund for its employees. Following is a trial balance for the fund at December 31, 2011: The following transactions took place during 2012: 1. Both Leisure City...
Abraham has just taken a new job as a health care manager at a large hospital. During the interview process, he was told that one of his responsibilities is to analyze the organization's financial...
Cognitive dissonance theory suggests that we commonly change our behavior to keep it consistent with our attitudes. True or false?
The sales for Jadco were $384,000 and cost of goods sold was $134,400. What is the companys gross profit margin (ratio of gross profit to sales)? a. 45% b. 65% c. 56% d. 35%
Briefly discuss the main Islamic principles affecting accounting and financial reporting.
An evaluation of a particular person, behavior, belief, or concept is called a(n) __________.
Draw a stem-and-leaf plot for each data set in Problems 28-31. Data set B Data set A: The annual wages of employees at a small accounting firm are given in thousands of dollars. 35 25 25 16 14 1 2 2...
2.4 2.5 6 List FOUR types of preference shares. Outline the functions of the Johannesburg Securities Exchange (JSE). Read the scenario below and answer the questions that follow. VENUS ENTERPRISES...
What is a lobbyist in US? How did this term emerge?
The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1 and 2. On September 1, Irene opened a retail store that specializes in sports car...
Larry and Lisa Williams, both 33 years old, have been married for 9 years. They live at 638 Arctic Way, Fairbanks, AK 99701. Lisa's Social Security number is 445- 81-1423 and Larry's is 798-09-8526....
Quince Interests is a partnership with a tax year that ends September 30, 2012. During that year, Potter, a partner, received $3,000 per month as a guaranteed payment, and his share of partnership...
The finite element method is a. an approximate analytical method b. a numerical method c. an exact analytical method
What is the role of transformation matrices in the finite element method?
True or False. The element mass matrices are always singular.

You want to sell an instrument which pays $1,000,000 if the price STof stock ZZ at the

Question:

Expert Answer:

To calculate the price of the instrument you described we can use a simplified version of the BlackS... View the full answer

Income Tax Fundamentals 2013

Students also viewed these accounting questions