Essays
1. Antioxidants
Antioxidants are capable of stabilizing, or deactivating, free radicals before
they attack cells. Antioxidants are found in different amounts in fruits, vegetables,
whole grains
Test #2 Study Guide
Attitudes
-Opinion & feelings
-We all have positive, negative or neutral feelings
Attributes
-Feature of the product, (factual statement), characteristics
-Ex. Ingredients, what it
Inputs
Periodic Rate
Pay Back Cutoff
Discounted Pay Back Cut off
Periods
Cash Flows
Cummultive Cashflows
First Time Positive
Paybackperiod
4%
4.00
3.00
0
-100
-100
Periods
Discounted Cashflows
Cummult
CHAPTER 10
Properties of Stock Options
Practice Questions
Problem 10.9.
What is a lower bound for the price of a six-month call option on a non-dividend-paying stock
when the stock price is $80, the s
CHAPTER 15
Options on Stock Indices and Currencies
Practice Questions
Problem 15.9.
A foreign currency is currently worth $1.50. The domestic and foreign risk-free interest rates
are 5% and 9%, respec
CHAPTER 16
Futures Options
Practice Questions
Problem 16.8.
Suppose you buy a put option contract on October gold futures with a strike price of $1,800
per ounce. Each contract is for the delivery of
CHAPTER 12
Introduction to Binomial Trees
Practice Questions
Problem 12.9.
A stock price is currently $50. It is known that at the end of two months it will be either $53
or $48. The risk-free interes
CHAPTER 13
Valuing Stock Options: The Black-Scholes-Merton Model
Practice Questions
Problem 13.13.
What is the price of a European call option on a non-dividend-paying stock when the stock
price is $5
CHAPTER 11
Trading Strategies Involving Options
Practice Questions
Problem 11.10.
Suppose that put options on a stock with strike prices $30 and $35 cost $4 and $7,
respectively. How can the options b
CHAPTER 7
Swaps
Practice Questions
Problem 7.9.
Companies X and Y have been offered the following rates per annum on a $5 million 10-year
investment:
Company X
Company Y
Fixed Rate
8.0%
8.8%
Floating
CHAPTER 9
Mechanics of Options Markets
Practice Questions
Problem 9.8.
A corporate treasurer is designing a hedging program involving foreign currency options.
What are the pros and cons of using (a)
CHAPTER 4
Interest Rates
Practice Questions
Problem 4.8.
The cash prices of six-month and one-year Treasury bills are 94.0 and 89.0. A 1.5-year bond that will pay
coupons of $4 every six months curren
CHAPTER 5
Determination of Forward and Futures Prices
Practice Questions
Problem 5.9.
A one-year long forward contract on a non-dividend-paying stock is entered into when the
stock price is $40 and th
CHAPTER 6
Interest Rate Futures
Practice Questions
Problem 6.8.
The price of a 90-day Treasury bill is quoted as 10.00. What continuously compounded
return (on an actual/365 basis) does an investor ea
CHAPTER 3
Hedging Strategies Using Futures
Practice Questions
Problem 3.12.
Suppose that in Example 3.4 the company decides to use a hedge ratio of 0.8. How does the
decision affect the way in which t
CHAPTER 2
Mechanics of Futures Markets
Practice Questions
Problem 2.11.
A trader buys two July futures contracts on frozen orange juice. Each contract is for the
delivery of 15,000 pounds. The current