1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
algol [13]
3 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]3 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"

You might be interested in
If the nominal interest rate is 7 percent and the real interest rate is -2.5 percent, then the inflation rate is Group of answer
madreJ [45]

Answer:

Inflation = 9.5%

Explanation:

Inflation can be defined as the persistent general rise in the price of goods and services in an economy at a specific period of time.

Given the following data;

Nominal interest rate = 7 percent.

Real interest rate = -2.5 percent

Real interest rate = Nominal interest rate - Inflation

Inflation = Nominal interest - Real interest rate

Inflation = 7 - (-2.5)

Inflation = 9.5%

4 0
3 years ago
Leisure Heating & Cooling installs and services commercial heating and cooling systems. Leisure uses job costing to calculat
marshall27 [118]

Answer:

Instructions are listed below

Explanation:

Giving the following information:

Overhead is allocated to each job based on the number of direct labor hours spent on that job.

At the beginning of the current year:

The estimated overhead= $66,750.

Estimated direct labor hours= 4,450

In November, Leisure started and completed the following two jobs:

Job 101

Direct materials used= $16,000

Direct labor hours used=195

Job 102

Direct materials used= $ 10,500

Direct labor hours used= 72

Leisure paid a $30 per hour wage rate.

A) predetermined overhead rate= total estimated manufacturing overhead/ total amount of allocation base

predetermined overhead rate= 66,750/4450= $15 hour

B) Job 101:

Manufacturing overhead allocated= direct labor hours*predetermined overhead rate

Manufacturing overhead allocated= 195*15= $2925

Job 102:

Manufacturing overhead allocated= 72*15= $1080

C) Job 101:

Total cost= direct materials + direct labor + manufacturing overhead

Total cost= 16000 + 195*30 + 2925= $24,775

Job 102:

Total cost= 10500 + 72*30 + 1080= $13740

4 0
3 years ago
Suppose some banks decide to increase their holdings of excess reserves relative to deposits. Ceteris paribus, this action will
slava [35]

The action of the bank will put decreased pressure on the money supply, and to reduce the impact of this action, the Fed could decrease the discount rate.

Basically, a decrease in discount rate will make it easy and cheaper for commercial banks to borrow money from Federal Reserve System and thus, results to increase in available credit and lending in the economy

Therefore, if the commercial banks decide to increase their holdings of excess reserves supposed to be remitted to Feds, then, this will put <u>decreased</u> pressure on the money supply, and the Fed would act by <u>decreasing</u> the discount rate.

Read more about this here

<em>brainly.com/question/20023706</em>

5 0
2 years ago
In an​ economy, the​ working-age population is 100 million. Of this​ total, 80.0 million workers are employed. 3.0 million worke
denis-greek [22]

Answer:

Unemployment rate = 3.6%

Explanation:

Unemployment is the number of people who are willing to work and are actively seeking work but are unable to find it. The unemployment rate is the unemployed / total number of people in the labor force x 100.

In the above scenario, the unemployed is 3 million people. The others are either already employed, unavailable, unwilling or not seeking work.

The labour force comprises of those who are employed and unemployed, that is 80million + 3million = 83 million.

Hence, unemployment rate = (3/83) x 100 = 3.6%

6 0
3 years ago
A(n) _____ is an independent wholesaler who buys related product lines from many manufacturers and sells them to industrial user
Genrish500 [490]

Answer:

1- Industrial distributors

Explanation:

1- They are independent wholesalers that often have a sales force they call on purchasing agents, they also make deliveries, extend credit and provide valuable information. This kind of distributors are used in different industries such as manufacturing, mining, etc.

2- Marketing concept: It is a Philosophy that establish a Company should analyze which are their client´s need and after that, make decisions to satisfy those need, better than anyone else. This concept is adopted by most of the firms nowadays.

3 0
3 years ago
Other questions:
  • ________ is very strong and durable and is therefore commonly used for cookware, dinnerware, and much ceramic sculpture.
    9·1 answer
  • Patsy possesses twenty-four acres of remote, rugged land. Patsy has the right to use the property, including extracting silver f
    6·1 answer
  • Reuben Rubino is a Tax Professional working during the Emerald Advance offer period before tax season starts. He has taken and p
    13·1 answer
  • Paul is an employee at a marketing firm. He is someone who prefers to be instructed by his seniors and avoids taking major respo
    11·1 answer
  • A company purchased a computer system at a cost of $24,000. The estimated useful life is 6 years, and the estimated residual val
    9·1 answer
  • The general manager of a clothing store recently gave a motivational PowerPoint presentation to his employees on the value of be
    13·1 answer
  • When a company utilizies _______ it arranges for other organizations in the supply chain to perform functions that were previous
    9·1 answer
  • The 2020 accounting records of Splish Brothers Inc. reveal these transactions and events. Payment of interest $ 10,400 Collectio
    14·1 answer
  • Data concerning Hinkson Corporation's single product appear below: Per Unit Percent of Sales Selling price $ 140 100 % Variable
    5·2 answers
  • What have you learned from the self-reflection in this class, and how do you think it will help you in the workforce? Be specifi
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!