Rebecca is interested in purchasing a European call on a hot new​ stock, Up, Inc. The call has a strike price of $ 99.00 and expires in 85 days. The current price of Up stock is $ 122.42​, and the stock has a standard deviation of 43 % per year. The​ risk-free interest rate is 6.62 % per year. Up stock pays no dividends. Use a​ 365-day year. a. Using the​ Black-Scholes formula, compute the price of the call. b. Use​ put-call parity to compute the price of the put with the same strike and expiration date. ​(Note​: Make sure to round all intermediate calculations to at least five decimal places.​) ​

Using the​ Black-Scholes formula, compute the price of the call.

The price of the call is ​$___________.​(Round to two decimal​places.)

b. Use​ put-call parity to compute the price of the put with the same strike and expiration date.

The price of the put is ​$___________.​ (Round to two decimal​places.)

Decision #1: Which set of Cash Flows is worth more now? Assume that your grandmother wants to give you generous gift. She wants you to choose which one of the following sets of cash flows you would like to receive: Option A: Receive a one-time gift of $ 10,000 today. Option B: Receive a $1500 gift each year for the next 10 years. The first $1400 would be received 1 year from today. Option C: Receive a one-time gift of $18,000 10 years from today. Compute the Present Value of each of these options if you expect the interest rate to be 3% annually for the next 10 years. Which of these options does financial theory suggest you should choose? Option A would be worth $__________ today. Option B would be worth $__________ today. Option C would be worth $__________ today. Financial theory supports choosing Option _______ Compute the Present Value of each of these options if you expect the interest rate to be 6% annually for the next 10 years. Which of these options does financial theory suggest you should choose? Option A would be worth $__________ today. Option B would be worth $__________ today. Option C would be worth $__________ today. Financial theory supports choosing Option _______ Compute the Present Value of each of these options if you expect to be able to earn 9% annually for the next 10 years. Which of these options does financial theory suggest you should choose? Option A would be worth $__________ today. Option B would be worth $__________ today. Option C would be worth $__________ today. Financial theory supports choosing Option _______ Decision #2 begins at the top of page 2! Decision #2: Planning for Retirement Erich and Mallory are 22, newly married, and ready to embark on the journey of life. They both plan to retire 45 years from today. Because their budget seems tight right now, they had been thinking that they would wait at least 10 years and then start investing $3000 per year to prepare for retirement. Mallory just told Erich, though, that she had heard that they would actually have more money the day they retire if they put $3000 per year away for the next 10 years - and then simply let that money sit for the next 35 years without any additional payments – then they would have MORE when they retired than if they waited 10 years to start investing for retirement and then made yearly payments for 35 years (as they originally planned to do). Please help Erich and Mallory make an informed decision: Assume that all payments are made at the END a year (or month), and that the rate of return on all yearly investments will be 7.2% annually. (Please do NOT ROUND when entering “Rates” for any of the questions below) a) How much money will Erich and Mallory have in 45 years if they do nothing for the next 10 years, then put $3000 per year away for the remaining 35 years? b) How much money will Erich and Mallory have in 10 years if they put $3000 per year away for the next 10 years? b2) How much will the amount you just computed grow to if it remains invested for the remaining 35 years, but without any additional yearly deposits being made? c) How much money will Erich and Mallory have in 45 years if they put $3000 per year away for each of the next 45 years? How much money will Erich and Mallory have in 45 years if they put away $250 d) per MONTH at the end of each month for the next 45 years? (Remember to adjust 7.2% annual rate to a Rate per month!) e) If Erich and Mallory wait 25 years (after the kids are raised!) before they put anything away for retirement, how much will they have to put away at the end of each year for 20 years in order to have $1,000,000 saved up on the first day of their retirement 45 years from today?

Problem 5-22
Yield to Maturity and Yield to Call

Arnot International's bonds have a current market price of $1,200. The bonds have an 12% annual coupon payment, a $1,000 face value, and 10 years left until maturity. The bonds may be called in 5 years at 109% of face value (Call price = $1,090).

1. What is the yield to maturity? Round your answer to two decimal places.
   %
2. What is the yield to call, if they are called in 5 years? Round your answer to two decimal places.
   %
3. Which yield might investors expect to earn on these bonds, and why?
   -Select-IIIIIIIVItem 3
   I. Investors would not expect the bonds to be called and to earn the YTM because the YTM is less than the YTC.
   II. Investors would expect the bonds to be called and to earn the YTC because the YTC is less than the YTM.
   III. Investors would expect the bonds to be called and to earn the YTC because the YTM is less than the YTC.
   IV. Investors would not expect the bonds to be called and to earn the YTM because the YTM is greater than the YTC.
4. The bond's indenture indicates that the call provision gives the firm the right to call them at the end of each year beginning in Year 5. In Year 5, they may be called at 109% of face value, but in each of the next 4 years the call percentage will decline by 1 percentage point. Thus, in Year 6 they may be called at 108% of face value, in Year 7 they may be called at 107% of face value, and so on. If the yield curve is horizontal and interest rates remain at their current level, when is the latest that investors might expect the firm to call the bonds?
   -Select- in Year 6in Year 7in Year 8in Year 9Bonds are always called

A corporation made a coupon payment yesterday on its 9.8​%-coupon, ​$1000 par value bonds that make​ semi-annual coupon​ payments, and mature in 14.5 years. You purchased one of these bonds 6.5 years ago​ and, at the​ time, the yield to maturity on these bonds was 4.99​% ​(APR). If you sold your bond today for ​$1856.81​, what​ APY% did you earn on your investment in the​ bond? ​ (In percent with 3​ decimals.) Please state in N , I/Y , PV, PMT, FV calculator form . TI BA ll Plus

A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a rate of 7%. The probability distribution of the risky funds is as follows:

The correlation between the fund returns is 0.12.

You require that your portfolio yield an expected return of 11%, and that it be efficient, on the best feasible CAL.

a. What is the standard deviation of your portfolio? (Round your answer to 2 decimal places.)

b. What is the proportion invested in the T-bill fund and each of the two risky funds? (Round your answers to 2 decimal places.)

T-bill fund = %

Stocks = %

Bonds = %

A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a rate of 7%. The probability distribution of the risky funds is as follows:

The correlation between the fund returns is 0.10.

What is the Sharpe ratio of the best feasible CAL? (Do not round intermediate calculations. Enter your answers as decimals rounded to 4 places.)

healthcare finance

Imagine that you are the financial manager of Clark Pediatrics

Center and you have a meeting with the board of directors in a

month. You need to create a financial analysis of the

organization. You have also been asked to compare Clark

Pediatrics to other pediatric healthcare organizations in the area

to create a trend comparison.

–

1. What must you do to complete a financial analysis?

a. What information do you need for both horizontal and vertical

analysis?

b. What sources can you use for comparison?

c. What decisions can be made regarding this information?

Identify the major types of financial institutions and their significance in the financial system. Describe how the institutions were affected by the financial crisis.

GEM, Inc., has two bonds outstanding in the market. Both Bond X and Bond Y have 7 percent coupons, make semiannual payments, and are priced at par value. Bond X has 20 years to maturity, whereas Bond Y has 5 years to maturity.

1. If interest rates suddenly rise by 2 percent (percentage points), what is the percentage change in the price of the two bonds?

2. If rates were to suddenly fall by 2 percent (percentage points) instead, what would be the percentage change in the price of the two bonds?

USING EXCEL FORMULAS PLEASE

Working capital: Mukhopadhya Network Associates has a current ratio of 1.60, where the current ratio is defined as follows: Current ratio = Current assets/Current liabilities. The firm's current assets are equal to $1,233,265, its accounts payables are $419,357, and its notes payables are $351,663. Its inventory is currently at $721,599. The company plans to raise funds in the short-term debt market and invest the entire amount in additional inventory. How much can note payable increase without the current ratio falling below 1.50?

Carlsbad Corporation's sales are expected to increase from $5 million in 2019 to $6 million in 2020, or by 20%. Its assets totaled $2 million at the end of 2019. Carlsbad is at full capacity, so its assets must grow in proportion to projected sales. At the end of 2019, current liabilities are $1 million, consisting of $250,000 of accounts payable, $500,000 of notes payable, and $250,000 of accrued liabilities. Its profit margin is forecasted to be 6%, and the forecasted retention ratio is 35%. Use the AFN equation to forecast the additional funds Carlsbad will need for the coming year. Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest dollar.

Create a 350-word memo to management including the following:

• Describe the use of internal rate of return (IRR), net present value (NPV), and the payback method in evaluating project cash flows.
• Describe the break-even point and its importance.
• Describe the advantages and disadvantages of each method.

Capital Budgeting Methods

Project S has a cost of $9,000 and is expected to produce benefits (cash flows) of $2,700 per year for 5 years. Project L costs $26,000 and is expected to produce cash flows of $7,100 per year for 5 years.

Calculate the two projects' NPVs, assuming a cost of capital of 10%. Do not round intermediate calculations. Round your answers to the nearest cent.

Project S: $  ???

Project L: $  ???

Which project would be selected, assuming they are mutually exclusive?

Based on the NPV values, [SELECT: Project S, Project L] would be selected.

Calculate the two projects' IRRs. Do not round intermediate calculations. Round your answers to two decimal places.

Project S: ???  %

Project L: ???  %.

Which project would be selected, assuming they are mutually exclusive?

Based on the IRR values, [SELECT: Project S, Project L] would be selected.

Calculate the two projects' MIRRs, assuming a cost of capital of 10%. Do not round intermediate calculations. Round your answers to two decimal places.

Project S: ???  %

Project L: ???  %

Which project would be selected, assuming they are mutually exclusive?

Based on the MIRR values, [SELECT: Project S, Project L] would be selected.

Calculate the two projects' PIs, assuming a cost of capital of 10%. Do not round intermediate calculations. Round your answers to three decimal places.

Project S:   ???

Project L: ???

Which project would be selected, assuming they are mutually exclusive?

Based on the PI values, [SELECT: Project S, Project L] would be selected.

Which project should actually be selected?

[SELECT: Project S, Project L] should actually be selected.

Carlsbad Corporation's sales are expected to increase from $5 million in 2019 to $6 million in 2020, or by 20%. Its assets totaled $6 million at the end of 2019. Carlsbad is at full capacity, so its assets must grow in proportion to projected sales. At the end of 2019, current liabilities are $1 million, consisting of $250,000 of accounts payable, $500,000 of notes payable, and $250,000 of accrued liabilities. Its profit margin is forecasted to be 4%, and the forecasted retention ratio is 35%. Use the AFN equation to forecast Carlsbad's additional funds needed for the coming year. Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest dollar.