Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
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Chapter 2, Problem 9P
To determine
The incorrect statement.
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(d) The following stock follows the Black-Scholes framework.
(i)
Current price is $45
(ii)
Pays continuous dividends of 2% per annum
(iii) Volatility is 30% per annum
(iv) R-F-Ris 5% papc
Determine the premium for a 3-month EP0 on a 1- year futures contract on the
stock with strike price $50
The following are the P/E ratios (price of stock divided by projected earnings per share) for 20 banks.
50, 19, 22, 21, 25, 18, 31, 21, 19, 14, 15, 18, 17, 34, 29, 23, 14, 18, 22, 22
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Find 20" and 75" percentiles for these ratios.
(a)
The 20th
percentile:
(b)
The 75th percentile:|
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A 60-year-old investor is interested in purchasing a fund that provides tax-free income and a high degree of safety. Which of the following funds would you recommend? (A) an insured municipal bond fund (B) a high-yield bond fund (C) a money market fund (D) a fund of hedge funds
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Contemporary Engineering Economics (6th Edition)
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