Data:
A (amount) = ?
P (Principal) = $ 4000
r (rate) = 6% → 0.06
t (time) = 2 years
Formula:
Solving:
A (amount) = ?
P (Principal) = $ 4000
r (rate) = 6% → 0.06
t (time) = 2 years
Formula:
Solving:
The price of a coupon bond and the yield to maturity are ________ related; that is, as the yield to maturity ________, the price
1 answer:
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Answer:
$98.02
Explanation:
Data provided in the question:
Value of contract = $1,330
Maximum value = $86
Minimum value = $65
Exercise price = $78
Risk-free rate = 3%
Now,
Current value of stock =
also,
a standard contract has 100 shares
thus,
Call price = Value of contract ÷ 100 shares
or
Call price = $1,330 ÷ 100 = $13.30
Thus,
Current value of stock =
or
Current value of stock = ( 2.625 × $13.30 ) + $63.1068
= $98.0193 ≈ $98.02