provide the relevant calculations. Assignment is individual. Assignments should be lodged at the next lecture (if you intend not to attend the lecture but would like to submit assignment‚ contact topic coordinator). Emailing assignment is not an option as one needs to get a permission in advance to do so. If you have been granted the permission then the assignment needs to be submitted before the start of the lecture‚ i.e. before 1pm. In case the assignment is submitted after 1pm‚ it will not be
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FI-516 – WEEK 3 HOMEWORK PROBLEMS Problem No. 1 on Options based on Chapter 8 A Call Option on the stock of XYZ Company has a market price of $9.00. The price of the underlying stock is $36.00‚ and the strike price of the option is $30.00 per share. What is the Exercise Value of this Call Option? What is the Time Value of the Option? Problem No. 2 on Options based on Chapter 8 The Exercise (Strike) Price on ABC Company’s Option is $21.00‚ its Exercise Value is $23.00‚ and its Time Value
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FINS 3635 - Options‚ Futures‚ and Risk Management Techniques: Mock Final May 28‚ 2012 1) Consider a firm with two classes of zero-coupon debt: senior debt and junior debt. Suppose that the firm’s debt securities both mature at time T1 and the senior ranking debt has a face value of X1 and the junior ranking debt has a face value of X2 . The claims of the senior debt holders are paid first‚ before the claims of the junior debt holders‚ who in turn are paid out their claims before the equity holders
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Problem No. 1 on Options based on Chapter 8 A Call Option on the stock of XYZ Company has a market price of $9.00. The price of the underlying stock is $36.00‚ and the strike price of the option is $30.00 per share. What is the Exercise Value of this Call Option? What is the Time Value of the Option? EV = $36.00 - $30.00 = $6 EV = $6.00 TV = $9.00 - $6.00 = $3.00 TV = $3.00 Problem No. 2 on Options based on Chapter 8 The Exercise (Strike) Price on ABC Company’s Option is $21.00‚ its
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Problem 20-6 on Call Options Based on Chapter 20 (Excel file included) You own a call option on Intuit stock with a strike price of $40. The option will expire in exactly 3 months’ time. a) If the stock is trading at $55 in 3 months‚ what will be the payoff of the call? b) If the stock is trading at $35 in 3 months‚ what will be the payoff of the call? c) Draw a payoff diagram showing the value of the call at expiration as a function of the stock price at expiration. Short call: value at expiration
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ADVANCED CORPORATE FINANCE BELZE Loïc Financial Options Lecture 7 – Chapter 20 ADVANCED CORPORATE FINANCE – BELZE Loïc – Adapted from 2011 Berk & DeMarzo Pearson Education 7 - 20 - 1 www.em-lyon.com © EMLYON School EMLYON Business 2011 Chapter Outline • • • • • • 20.1 – Option Basics 20.2 – Option Payoffs at Expiration 20.3 – Put-Call Parity 20.4 – Factors Affecting Option Prices 20.5 – Exercising Options Early 20.6 – Options and Corporate Finance ADVANCED CORPORATE
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CITIC TOWER II: THE REAL OPTION Suffolk University – FIN- 881 Fall 2014 Name: Abdelrhman El Refaiy Larry Young the Chairman of Citic Pacific Limited has to make a decision to develop a new project under the name Citic Tower II. The development project that will take place in Hong Kong is expected to leave the company with $60 MM in losses as per NPV analysis. Citic’s property development team has set rigid assumptions to build their NPV model that estimated net positive cash inflows at $1.54 billion
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1. A company enters into a short futures contract to sell $5000. The current future price is 250 cents per pound. The initial margin is $3000 and the maintenance margin is $2000. What price change would lead to a margin call? Under what circumstances $1500 could be withdrawn from the margin account? 2. Stock is expected to pay a dividend of Tk 10 per share in 2 months and again in 5 months. The stock price is Tk 500 and risk free rate of interest is 8% p.a. with continuously compounded for all
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Econ 252 Spring 2011 Final Exam Econ 252 - Financial Markets Professor Robert Shiller Spring 2011 Professor Robert Shiller Final Exam Instructions: • • • • • • • • The exam consists of a total of twelve pages including this coversheet. There are two parts to this exam. In Part I‚ answer any sixteen of the twenty questions‚ five minutes each. The total for Part I is 80 minutes. In Part II‚ answer all seven questions. The total for Part II is 70 minutes.
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has turned sour as BP’s stock price dipped dramatically. Upon analysing this fund-raising issuance along with the current market environment‚ we have concluded that this offering is not as valuable despite the addition of the repurchase plan (put option) after the first payment. We will be discussing our methodology on how we came up with our conclusion and we will also give several recommendations when this issuance will be worth investing in. Methodology The team decided to value the stock
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