Chapter 4

# Options, Futures, and Other Derivatives with Derivagem CD (7th Edition)

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Chapter 4 Homework Solution 1. a. % 76 . 13 1376 . 0 4 14 . 0 1 ln 4 1 ln = = + = + = m R m R m c b. % 75 . 14 1475 . 0 1 4 14 . 0 1 1 1 1 1 4 2 1 1 1 2 2 = = - + = - + = m m m R m R 3. ( 29 ( 29 ( 29 ( 29 ( 29 ( 29 % 42 . 10 1042 . 0 2 1 104 05 . 0 1 4 05 . 0 1 4 74 , 96 74 . 96 \$ 052 . 0 1 100 052 . 0 1 1 1 052 . 0 4 1 1 1 1 3 2 3 3 = = + + + + + = = + + + - = + + + - = R R i FV i i C B n n 4. a. % 00 . 10 1000 . 0 1000 1000 1100 0 0 1 1 = = - = - = P P P R b. ( 29 [ ] ( 29 [ ] % 76 . 9 0976 . 0 1 10 . 0 1 2 1 1 or % 76 . 9 0976 . 0 1 1000 1100 2 1 2 1 1 2 1 1 1 2 0 1 2 = = - + = - + = = = - = - = m m R m R P P m R c. ( 29 [ ] ( 29 [ ] % 57 . 9 0957 . 0 1 10 . 0 1 12 1 1 12 1 1 1 2 = = - + = - + = m R m R d. % 53 . 9 0953 . 0 1 10 . 0 1 ln 1 1 ln = = + = + = m R m R m c

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5. % 2 . 9 25 . 0 50 . 0 6 . 8 25 . 1 7 . 8 50 . 1 % 0 . 9 25 . 0 50 . 0 5 . 8 00 . 1 6 . 8 25 . 1 % 8 . 8 25 . 0 50 . 0 4 . 8 75 . 0 5 . 8 00 . 1 % 8 . 8 50 . 0 75 . 0 2 . 8 50 . 0 4 . 8 75 . 0 % 4 . 8 25 . 0 50 . 0 0 . 8 25 . 0 2 . 8 50 . 0 1 2 1 1 2 2 1 1 1 2 1 1 2 2 1 1 1 2 1 1 2 2 1 1 1 2 1 1 2 2 1 2 1 2 1 1 2 2 1 1 = - - = - - = = - - = - - = = - - = - - = = - - = - - = = - - = - - = T T T R T R R T T T R T R R T T T R T R R T T T R
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Chapter 4 - Chapter 4 Homework Solution 1 a R 0.14 Rc = m...

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