Question: I need help with these questions for my Homework for a Finance Subject. Please write the answers in a detailed manner. Question 1 ( 4
I need help with these questions for my Homework for a Finance Subject. Please write the answers in a detailed manner.
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Sun Screen has a zero coupon bond issue outstanding with a face value of $ that matures in one year. The current market value of the firms asset is $ The standard deviation of the return on the firm's asset is
per year, and the annual riskfree rate is per year, compounded continuously. Based on the Black and Scholes model, what is the market value of the firm's equity and debt?
Question Marks
Assume that a call and put option on ABC stock have the same strike price of $ The call premium is $ and the put premium is $ Please calculate the profit of the call and put option for a person who purchases the options for the following stock prices?
a Stock price at expiry is $ Marks
b Stock price at expiry is $ Marks
c Stock price at expiry is $ Marks
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