Suppose that a stock's "vol" is 18%. What is periodic vol for a six-month period? Plug...

Suppose that a stock's "vol" is 18%. What is periodic vol for a six-month period? Plug in a raw number rounded to 4 decimals (for example: for 5%, plug in: .0500).

Expert Solution

Assuming the vol given is annualised volatility

Periodic vol=Annualised vol/sqrt(12)*sqrt(6)=18%/sqrt(12)*sqrt(6)=0.1273

jeff jeffy answered 3 years ago

Describe what a periodic phenomenon is,and what is Period and frequency.

Eunice Ltd. has the following budgeted sales for the next six-month period: Month Unit Sales January...

Eunice Ltd. has the following budgeted sales for the next six-month period: Month Unit Sales January 80,000 February 90,000 March 120,000 April 150,000 May 180,000 June 120,000 Eunice Ltd. sells a single product at a price of $60 per unit. There were 18,000 units of finished goods in inventory at the beginning of February. Eunice Ltd.’s policy is to keep the inventory of finished goods equal to 20% of the unit sales for the next month. Three kilograms of materials...

Suppose that 6-month, 12-month, 18-month, 24-month, and 30-month zero rates are 2%, 2.1%, 2.3%, 2.5%, and...

Suppose that 6-month, 12-month, 18-month, 24-month, and 30-month zero rates are 2%, 2.1%, 2.3%, 2.5%, and 2.7% per annum with continuous compounding, respectively. Estimate the cash price of a bond with a face value of 100 that will mature in 30 months and pays a coupon of 4% per annum semiannually. Please give me the process, thank you!

Currently, Atlas Tours has $6.76 million in assets. This is a peak six-month period. During the...

Currently, Atlas Tours has $6.76 million in assets. This is a peak six-month period. During the other six months, temporary current assets drop to $570,000. Temporary current assets $1,370,000 Permanent current assets 2,140,000 Capital assets 3,250,000 Total assets $6,760,000 Short-term rates are 5 percent. Long-term rates are 7 percent. Annual earnings before interest and taxes are $1,250,000. The tax rate is 38 percent. a. If the assets are perfectly hedged throughout the year, what will earnings...

Computer’s R Us, is a manufacturer of computer keyboards. The requirements over a typical six-month period...

Computer’s R Us, is a manufacturer of computer keyboards. The requirements over a typical six-month period are as follows; Demand per month. 1: 600 2: 600 3: 450 4: 750 5: 900 6: 300 The current workforce level is 4 workers. Production rate is 150/worker/month. The following costs apply:Wages = $2,000/worker/month Hiring cost = $200/worker Layoff Cost = $250/worker Inventory holding cost = $1/unit/month Back ordering cost = $2/unit/month What would be the production rate per month for a level...

The current price of the stock of Bufflehead company is C$100. During each six-month period it...

The current price of the stock of Bufflehead company is C$100. During each six-month period it will either rise by 10% or fall by 10%. The interest rate is 6% per annum compounded semi-annually. a. Calculate the value of a one-year European put option on Bufflehead's stock with an exercise price of C$115. b. Recalculate the value of the Bufflehead put option, assuming that it is an American option.

1. Orange Inc., is a manufacturer of computer keyboards. Requirements over a typical six-month period are...

1. Orange Inc., is a manufacturer of computer keyboards. Requirements over a typical six-month period are as follows; (Questions 1,2,3) Month January February March April May June Forecasted Demand 200 300 400 400 200 300 Cost and other Information Inventory holding cost Back ordering cost Wages Hiring cost Lay off cost Production rate Beginning Number of employees $1/unit/month $2/unit/ month $1000/worker/ employee $400/worker $250/worker 100/worker/ month 4 in the beginning of January If a Chase strategy is applied, what is...

Currently, Atlas Tours has $6.12 million in assets. This is a peak six-month period. During the...

Currently, Atlas Tours has $6.12 million in assets. This is a peak six-month period. During the other six months, temporary current assets drop to $490,000. Temporary current assets $1,290,000 Permanent current assets 1,980,000 Capital assets 2,850,000 Total assets $6,120,000 Short-term rates are 4 percent. Long-term rates are 5 percent. Annual earnings before interest and taxes are $1,170,000. The tax rate is 38 percent. a. If the assets are perfectly hedged throughout the year, what will earnings...

Currently, Atlas Tours has $6.04 million in assets. This is a peak six-month period. During the...

Currently, Atlas Tours has $6.04 million in assets. This is a peak six-month period. During the other six months, temporary current assets drop to $480,000. Temporary current assets $1,280,000 Permanent current assets 1,960,000 Capital assets 2,800,000 Total assets $6,040,000 Short-term rates are 5 percent. Long-term rates are 7 percent. Annual earnings before interest and taxes are $1,160,000. The tax rate is 38 percent. a. If the assets are perfectly hedged throughout the year, what will earnings...

Buffelhead’s stock price is $220 and could halve or double in each six–month period (equivalent to...

Buffelhead’s stock price is $220 and could halve or double in each six–month period (equivalent to a standard deviation of 98%). Suppose that you own a one–year American put option on Buffelhead stock with an exercise price of $220. The interest rate is 20% a year. (a) Calculate the value of the put. (b) Now compare the value with that of an equivalent European put option.

Question