You are required to price a one-year, yen-denominated currency option on the USD. The exchange rate over the next year is modele
1 answer:
Answer:
The value of the so-called up factor is
Step-by-step explanation:
From the question we are told that
The number of period is n = 4
The volatility of the exchange rate is
The continuously compounded risk-free interest rate for the yen is r = 0.05
The continuously compounded risk-free interest rate for the USD is R = 0.02
Generally the so-called up factor u is mathematically represented as
=>
=>
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Answer:
7,897.30 miles
Step-by-step explanation:
It is given that the North Pole is at a distance of 3,949 miles from the center of the earth.
We also know that the sea floor is below 2.4 miles from the sea level.
It is given that a submarine is located at the sea floor near North Pole. Hence, the distance of the submarine from the center of the earth would be
3949 - 2.4 = 3946.6 miles.
On the other hand, the South Pole is given to be at an elevation of 1.7 miles from the sea level.
Since we know that the sea level is at a distance of 3949 miles from the center of the earth, we can immediately calculate the distance of the South Pole from the center of the earth to be
3949 + 1.7 = 3950.7 miles.
Putting all of this together, we see that the center of the earth is at a distance of 3946.6 miles from the submarine near the North Pole, and the center of the earth in turn is 3950.7 miles from the South Pole.
Hence, the distance between the submarine and a person on the South Pole = 3946.6 + 3950.7 = 7897.3 miles.
