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algol [13]
4 years ago
11

The current market value of the assets of AMN Co. is $47 million, with a standard deviation of 21 percent per year. The firm has

zero-coupon bonds outstanding with a total face value of $35 million. These bonds mature in two years. The risk-free rate is 3.6 percent per year, compounded continuously. What is the value of d1 as it applies to the Black-Scholes option pricing model
Business
1 answer:
larisa [96]4 years ago
8 0

Answer:

The answer is "1.38357"

Explanation:

Given values:

The current market value of the assets (s)= $ 47

standard deviation(\sigma) = 21%

risk-free rate (r)=3.6%

Exercise price (X) = 35

Maturity time (T)= 2 year

Formula:

\bold{d1 =\frac{\frac{s}{X}+(r+0.5 \times \sigma^2)\times T}{\sigma \times \sqrt{T}}}\\\\

by solving the given values, we get the d1 value that is "1.38357"

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I don’t think so fbdvvhhdgnt
8 0
4 years ago
The Federal Reserve can: A. simultaneously set any money supply and any nominal interest rate target. B. set the target money su
adell [148]

Answer:

The answer is C.

Explanation:

The Federal Reserve acts as the Central Bank. And the tool it uses to control the economy is monetary policy and its tools are:

1. Reserve requirements

2. Open market operation

3. Discount rate(interest rate)

The Federal reserve can control the money supply in the eco economy through any of these tools.

For example, if Federal reserve wants to increase the money supply, they can do the following:

a) reducing the interest rate it lends commercial banks money, commercial banks too reduces the interest it charges businesses or households. With lower interest, households and businesses are encouraged to borrow, thereby increasing the money supply and vice-versa.

b) lowering the reserve requirements. Reserve requirement is the minimum balance commercial banks must have with the federal reserves. This is guided by law. Lowering the reserve requirements enable commercial banks to have more money to lend to their customers and vice-versa.

In all, Federal reserve use any of these tools to control money supply that is consistent with their target nominal interest rate.

4 0
3 years ago
Caldwell Company manufactures two products, Product A and Product B. The company's overhead costs consist of setting up machines
Molodets [167]

Answer:

$96,080

Explanation:

Calculation of Caldwell Company amount of overhead applied to Product A using activity-based costing.

First step is to use ABC, Overhead assigned to Product A :

Using this formula

[(Number of machine setups for Product A / 1,000) * Machine setup Overhead costs] + [(Number of machine hours for Product A / 30,000) * Machining Overhead costs] + [(Number of inspections for Product A / 1,500) * Inspecting Overhead costs]

Hence:

Let plug in the formula

= [(240 / 1,000) * $105,000] + [(22,200 / 30,000) * $50,000] + [(660 / 1,500) * $77,000]

= $25,200 + $37,000 + $33,880

= $96,080

Therefore Caldwell Company amount of overhead applied to Product A using activity-based costing will be:$96,080

8 0
3 years ago
Have Americans always shared the same social and economic goals throughout history?
Elodia [21]

<u>Answer:</u>

<em>Yes, Americans always shared the same social and economic goals throughout history.</em>

<u>Explanation:</u>

The social economic segmentation of the American market. Market segmentation is the movement of distributing a widespread customer or business exchange, ordinarily consists of existent and potential clients, into sub-groups of customers which is recognized as segments which is based on the different type of shared features.

In distributing or segmenting businesses, researchers look for common features such as distributed needs, mutual interests, related lifestyles or even comparable demographic characterizations.

8 0
3 years ago
What form of capital will Woolworths obtain?
Amanda [17]

The form of capital does Woolworths have is-

Woolworths Group manages its capital structure with the objective of enhancing long‑term shareholder value through funding its business at an optimized weighted average cost of capital.

  • Woolworths organization restrained is a locally owned indexed public employer, deriving revenue from the retail sale of supermarket food and trendy products.
  • Woolworths group restrained is a locally owned indexed public company, deriving sales from the retail sale of supermarket food and well-known merchandise.
  • Woolworths Strategic Framework to ensure its relevance to our organization within the context of the hastily evolving consumer panorama as we pursue our aspiration of being a leading, reason driven, and really related store.

Learn more about Woolworths brainly.com/question/28352580

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3 0
2 years ago
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