Kasimov Corp. has a zero coupon bond that matures in five years
with a face value of $94,000. The current value of the company’s
assets is $90,000, and the standard deviation of its return on
assets is 35 percent per year. The risk-free rate is 3 percent per
year, compounded continuously.
a.
What is the value of a risk-free bond with the same face value
and maturity as the current bond? (Do not round
intermediate calculations and round your...