A stock is selling for $68.50. Interest rates are 6.0% and the returns on the stock have a standard deviation of 32.0%. What is the forecasted price of the stock using 3-month periods at Suvudu?
(a) $74.08
(b) $94.24
(c) $100.17
(d) $111.12
Answer: c
Fin 402
- The spot price of the market index is $900. After 3 months the market index is priced at $920. The annual rate of interest on treasuries is 4.8% (0.4% per month). The premium on the long put, with an exercise price of $930, is $8.00. What is the profit or loss at expiration for the long put?
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- Which of the following terms most accurately describes the forward curve for soybeans over the next two years?
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