-$3,080.
Using the CF function of your financial calculator, input the initial investment as a cash outflow (negative) of $11,400, then each of the cash inflows (positive) as $2,250 for each of the first 5 years and $1,500 for the sixth year. Hit the NPV button and input the required rate of return as 14.4% then the NPV will be -$3,080.
If Jamie would like to compare one savings account to
another savings account, and that he compares the amount of the interest he
will earn in one year in each account, it is likely that he is demonstrating
the annual percentage yield. This is where the annual rate return exist in
which the effect of copound interest is being taken into account.
hope this helps
Answer:
The correct answer is letter "D": average; variability.
Explanation:
The Monte Carlo Simulation is a method of probability analysis done by running several variables through a model to determine different outcomes. By using Monte Carlo's simulation decision-makers can determine the range of possibilities and their probability of occurrence for any choice of action. In other words, it allows us to make decision recommendations for inputs that involve the outputs on <em>average </em>but also in <em>variability</em>.
Answer:
The price of the put-option on the same stock with the same strike price is $3.75.
Explanation:
To find the price of the put option on an underlying asset given the price on the call option's price for the same underlying asset with the same strike price is given, we apply put-call parity model.
Put call parity model: p = K x e^(-rT) + c - St .
in which: p: put option's price;
K: underlying asset's strike price;
r: risk-free rate;
T: time to maturity denominated in year;
c= call option's price;
St = spot price of underlying asset .
So, p = 50 x e^(-0.06 x 1/12) + 1 - 47 = $3.75 .
