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a) Calculate the accumulated value after 6 month of an investment of kshs 1,000 at time t=0 at the following rate of interest
i) A force of interest of 0.05%
ii) A rate of interest of 5% per annum
convertible monthly
iii) An effective rate of interest of 5% per
annum
b) Given an investment of kshs1,000,000. Find the accumulation after 5years using:
I) simple discount of 8% per annum
II) compound discount of 8% per annum
III) compound interest of 8% per annum
1. The Moon company currently sells for 100 $. The annual stock price volatility is %10 and risk- free interest rate %8, the price of a call on a company’s stock with strike price 200 $ and time period 2 months. Find the stock option price with Black and Scholes Model. If option market value 320 $ what is the option strategy?
2. The Moon company currently (t1) sells for 100 $ . The annual stock price volatility is %10 and risk- free interest rate %8, the price of a call on a company’s stock with strike price 120 $ and time period 2 months. Changes in parameters in period t2 are as shown in the table.
t2
Price 110
volatility %8
period 3 months
Risk free interest rate %5
a) What is the option price changes if delta value 0.05?
b) What is the Gamma value of the stock?
c) What is the Vega value of the stock?
d) What is the option price changes if theta value 0.04?
e) What is the Rho value of stock?
3. A loan of 20000 at a rate of 5% is paid off in one years, compute the revised payment and create payment table.
1. The Moon company currently sells for 100 $. The annual stock price volatility is %10 and risk- free interest rate %8, the price of a call on a company’s stock with strike price 200 $ and time period 2 months. Find the stock option price with Black and Scholes Model. If option market value 320 $ what is the option strategy?
2. The Moon company currently (t1) sells for 100 $ . The annual stock price volatility is %10 and risk- free interest rate %8, the price of a call on a company’s stock with strike price 120 $ and time period 2 months. Changes in parameters in period t2 are as shown in the table.
t =2
Price =110
volatility =%8
period =3 months
Risk free interest rate= %5
a) What is the option price changes if delta value 0.05?
b) What is the Gamma value of the stock?
c) What is the Vega value of the stock?
d) What is the option price changes if theta value 0.04?
e) What is the Rho value of stock?
If you pay 5000$ at a rate %10 in five years, by payingfive equal installments at the end of the every year. How much is each installment?
2. Pia invests $2500 in an account that earns simple interest. At the end of each month, she earns $11.25 in interest. a What annual rate of simple interest is Pia carning Round your answer to two decimal places. b) How much money will be in her account after 7 years? C. How long will it take for her money to double?
When an investor evaluates a 6-month compound interest of 1.500.000 TL with an interest rate of 15 percent, how much will it be with interest after 4 years?
The Moon company currently sells for 100 $. The annual stock price volatility is %10 and risk- free interest rate %8, the price of a call on a company’s stock with strike price 200 $ and time period 2 months. Find the stock option price with Black and Scholes Model. If option market value 320 $ what is the option strategy?
Suppose that an account offers a nominal interest rate of 10 %,what is the effective interest rate? if the nominal interest rate is the same, but interest is payable monthly, weekly and daily?
judy wishes to save up $50 000 to go towards the purchase of a house 10 years from now. What should her quarterly payments be, if she invests the money at 5.6% compounded quarterly?
The manager of XYZ Furniture is trying to figure out how much to charge for a chair that just arrived. The chair was bought at a wholesale price of R3 500. XYZ Furniture marks up all furniture by 40%. At what price should the manager sell the chair?
