Question

In: Finance

In this assignment, you will price an option for Facebook (TICKER:FB) and use the Excel upload...

In this assignment, you will price an option for Facebook (TICKER:FB) and use the Excel upload file provided for your calculations. You have daily prices for FB between 4/7/2014 and 4/2/2015.

1. Calculate daily returns, volatility and annualized volatility.

2. Calculate the price of Call option on FB that expires on 4/17/2015. Strike price for the option is 77$. Assume you’re calculating price on 4/6/2015 and FB trades at $81.56 on that date.

3. After you calculated the price based on your assumptions you realized that the option trades at 4.81$. Calculate the implied volatility using goal seek. Daily Prices

Date FB
4/7/14 56.95
4/8/14 58.19
4/9/14 62.41
4/10/14 59.16
4/11/14 58.53
4/14/14 58.89
4/15/14 59.09
4/16/14 59.72
4/17/14 58.94
4/21/14 61.24
4/22/14 63.03
4/23/14 61.36
4/24/14 60.87
4/25/14 57.71
4/28/14 56.14
4/29/14 58.15
4/30/14 59.78
5/1/14 61.15
5/2/14 60.46
5/5/14 61.22
5/6/14 58.53
5/7/14 57.39
5/8/14 56.76
5/9/14 57.24
5/12/14 59.83
5/13/14 59.83
5/14/14 59.23
5/15/14 57.92
5/16/14 58.02
5/19/14 59.21
5/20/14 58.56
5/21/14 60.49
5/22/14 60.52
5/23/14 61.35
5/27/14 63.48
5/28/14 63.51
5/29/14 63.83
5/30/14 63.3
6/2/14 63.08
6/3/14 62.87
6/4/14 63.34
6/5/14 63.19
6/6/14 62.5
6/9/14 62.88
6/10/14 65.77
6/11/14 65.78
6/12/14 64.29
6/13/14 64.5
6/16/14 64.19
6/17/14 64.4
6/18/14 65.6
6/19/14 64.34
6/20/14 64.5
6/23/14 65.37
6/24/14 65.72
6/25/14 67.44
6/26/14 67.13
6/27/14 67.6
6/30/14 67.29
7/1/14 68.06
7/2/14 66.45
7/3/14 66.29
7/7/14 65.29
7/8/14 62.76
7/9/14 64.97
7/10/14 64.87
7/11/14 66.34
7/14/14 67.9
7/15/14 67.17
7/16/14 67.66
7/17/14 66.41
7/18/14 68.42
7/21/14 69.4
7/22/14 69.27
7/23/14 71.29
7/24/14 74.98
7/25/14 75.19
7/28/14 74.92
7/29/14 73.71
7/30/14 74.68
7/31/14 72.65
8/1/14 72.36
8/4/14 73.51
8/5/14 72.69
8/6/14 72.47
8/7/14 73.17
8/8/14 73.06
8/11/14 73.44
8/12/14 72.83
8/13/14 73.77
8/14/14 74.3
8/15/14 73.63
8/18/14 74.59
8/19/14 75.29
8/20/14 74.81
8/21/14 74.57
8/22/14 74.57
8/25/14 75.02
8/26/14 75.96
8/27/14 74.63
8/28/14 73.86
8/29/14 74.82
9/2/14 76.68
9/3/14 75.83
9/4/14 75.95
9/5/14 77.26
9/8/14 77.89
9/9/14 76.67
9/10/14 77.43
9/11/14 77.92
9/12/14 77.48
9/15/14 74.58
9/16/14 76.08
9/17/14 76.43
9/18/14 77
9/19/14 77.91
9/22/14 76.8
9/23/14 78.29
9/24/14 78.54
9/25/14 77.22
9/26/14 78.79
9/29/14 79
9/30/14 79.04
10/1/14 76.55
10/2/14 77.08
10/3/14 77.44
10/6/14 77.56
10/7/14 76.29
10/8/14 77.52
10/9/14 75.91
10/10/14 72.91
10/13/14 72.99
10/14/14 73.59
10/15/14 73.21
10/16/14 72.63
10/17/14 75.95
10/20/14 76.95
10/21/14 78.69
10/22/14 78.37
10/23/14 80.04
10/24/14 80.67
10/27/14 80.28
10/28/14 80.77
10/29/14 75.86
10/30/14 74.11
10/31/14 74.99
11/3/14 73.88
11/4/14 75.76
11/5/14 74.83
11/6/14 75.26
11/7/14 75.6
11/10/14 75
11/11/14 74.61
11/12/14 74.72
11/13/14 74.25
11/14/14 74.88
11/17/14 74.24
11/18/14 74.34
11/19/14 73.33
11/20/14 73.6
11/21/14 73.75
11/24/14 74.01
11/25/14 75.63
11/26/14 77.62
11/28/14 77.7
12/1/14 75.1
12/2/14 75.46
12/3/14 74.88
12/4/14 75.24
12/5/14 76.36
12/8/14 76.52
12/9/14 76.84
12/10/14 76.18
12/11/14 77.73
12/12/14 77.83
12/15/14 76.99
12/16/14 74.69
12/17/14 76.11
12/18/14 78.4
12/19/14 79.88
12/22/14 81.45
12/23/14 80.61
12/24/14 80.77
12/26/14 80.78
12/29/14 80.02
12/30/14 79.22
12/31/14 78.02
1/2/15 78.45
1/5/15 77.19
1/6/15 76.15
1/7/15 76.15
1/8/15 78.18
1/9/15 77.74
1/12/15 76.72
1/13/15 76.45
1/14/15 76.28
1/15/15 74.05
1/16/15 75.18
1/20/15 76.24
1/21/15 76.74
1/22/15 77.65
1/23/15 77.83
1/26/15 77.5
1/27/15 75.78
1/28/15 76.24
1/29/15 78
1/30/15 75.91
2/2/15 74.99
2/3/15 75.4
2/4/15 75.63
2/5/15 75.61
2/6/15 74.47
2/9/15 74.44
2/10/15 75.19
2/11/15 76.51
2/12/15 76.23
2/13/15 75.74
2/17/15 75.6
2/18/15 76.71
2/19/15 79.42
2/20/15 79.9
2/23/15 78.84
2/24/15 78.45
2/25/15 79.56
2/26/15 80.41
2/27/15 78.97
3/2/15 79.75
3/3/15 79.6
3/4/15 80.9
3/5/15 81.21
3/6/15 80.01
3/9/15 79.44
3/10/15 77.55
3/11/15 77.57
3/12/15 78.93
3/13/15 78.05
3/16/15 78.07
3/17/15 79.36
3/18/15 80.91
3/19/15 82.75
3/20/15 83.8
3/23/15 84.43
3/24/15 85.31
3/25/15 82.92
3/26/15 83.01
3/27/15 83.3
3/30/15 83.2
3/31/15 82.22
4/1/15 81.67
4/2/15 81.56

Solutions

Expert Solution

1.) Daily returns, Volatility and annualized volatility - (Excel calculations)

A B C D E
Date FB Daily Return Daily Return
04-07-2014 56.95
04-08-2014 58.19 2.18% =(B3-B2)/B2
04-09-2014 62.41 7.25% =(B4-B3)/B3
04-10-2014 59.16 -5.21% =(B5-B4)/B4
04-11-2014 58.53 -1.06% =(B6-B5)/B5
4/14/14 58.89 0.62% =(B7-B6)/B6
4/15/14 59.09 0.34% =(B8-B7)/B7
4/16/14 59.72 1.07% =(B9-B8)/B8
4/17/14 58.94 -1.31% =(B10-B9)/B9
4/21/14 61.24 3.90% =(B11-B10)/B10
4/22/14 63.03 2.92% =(B12-B11)/B11
4/23/14 61.36 -2.65% =(B13-B12)/B12
4/24/14 60.87 -0.80% =(B14-B13)/B13
4/25/14 57.71 -5.19% =(B15-B14)/B14
4/28/14 56.14 -2.72% =(B16-B15)/B15
4/29/14 58.15 3.58% =(B17-B16)/B16
4/30/14 59.78 2.80% =(B18-B17)/B17
05-01-2014 61.15 2.29% =(B19-B18)/B18
05-02-2014 60.46 -1.13% =(B20-B19)/B19
05-05-2014 61.22 1.26% =(B21-B20)/B20
05-06-2014 58.53 -4.39% =(B22-B21)/B21
05-07-2014 57.39 -1.95% =(B23-B22)/B22
05-08-2014 56.76 -1.10% =(B24-B23)/B23
05-09-2014 57.24 0.85% =(B25-B24)/B24
05-12-2014 59.83 4.52% =(B26-B25)/B25
5/13/14 59.83 0.00% =(B27-B26)/B26
5/14/14 59.23 -1.00% =(B28-B27)/B27
5/15/14 57.92 -2.21% =(B29-B28)/B28
5/16/14 58.02 0.17% =(B30-B29)/B29
5/19/14 59.21 2.05% =(B31-B30)/B30
5/20/14 58.56 -1.10% =(B32-B31)/B31
5/21/14 60.49 3.30% =(B33-B32)/B32
5/22/14 60.52 0.05% =(B34-B33)/B33
5/23/14 61.35 1.37% =(B35-B34)/B34
5/27/14 63.48 3.47% =(B36-B35)/B35
5/28/14 63.51 0.05% =(B37-B36)/B36
5/29/14 63.83 0.50% =(B38-B37)/B37
5/30/14 63.3 -0.83% =(B39-B38)/B38
06-02-2014 63.08 -0.35% =(B40-B39)/B39
06-03-2014 62.87 -0.33% =(B41-B40)/B40
06-04-2014 63.34 0.75% =(B42-B41)/B41
06-05-2014 63.19 -0.24% =(B43-B42)/B42
06-06-2014 62.5 -1.09% =(B44-B43)/B43
06-09-2014 62.88 0.61% =(B45-B44)/B44
06-10-2014 65.77 4.60% =(B46-B45)/B45
06-11-2014 65.78 0.02% =(B47-B46)/B46
06-12-2014 64.29 -2.27% =(B48-B47)/B47
6/13/14 64.5 0.33% =(B49-B48)/B48
6/16/14 64.19 -0.48% =(B50-B49)/B49
6/17/14 64.4 0.33% =(B51-B50)/B50
6/18/14 65.6 1.86% =(B52-B51)/B51
6/19/14 64.34 -1.92% =(B53-B52)/B52
6/20/14 64.5 0.25% =(B54-B53)/B53
6/23/14 65.37 1.35% =(B55-B54)/B54
6/24/14 65.72 0.54% =(B56-B55)/B55
6/25/14 67.44 2.62% =(B57-B56)/B56
6/26/14 67.13 -0.46% =(B58-B57)/B57
6/27/14 67.6 0.70% =(B59-B58)/B58
6/30/14 67.29 -0.46% =(B60-B59)/B59
07-01-2014 68.06 1.14% =(B61-B60)/B60
07-02-2014 66.45 -2.37% =(B62-B61)/B61
07-03-2014 66.29 -0.24% =(B63-B62)/B62
07-07-2014 65.29 -1.51% =(B64-B63)/B63
07-08-2014 62.76 -3.88% =(B65-B64)/B64
07-09-2014 64.97 3.52% =(B66-B65)/B65
07-10-2014 64.87 -0.15% =(B67-B66)/B66
07-11-2014 66.34 2.27% =(B68-B67)/B67
7/14/14 67.9 2.35% =(B69-B68)/B68
7/15/14 67.17 -1.08% =(B70-B69)/B69
7/16/14 67.66 0.73% =(B71-B70)/B70
7/17/14 66.41 -1.85% =(B72-B71)/B71
7/18/14 68.42 3.03% =(B73-B72)/B72
7/21/14 69.4 1.43% =(B74-B73)/B73
7/22/14 69.27 -0.19% =(B75-B74)/B74
7/23/14 71.29 2.92% =(B76-B75)/B75
7/24/14 74.98 5.18% =(B77-B76)/B76
7/25/14 75.19 0.28% =(B78-B77)/B77
7/28/14 74.92 -0.36% =(B79-B78)/B78
7/29/14 73.71 -1.62% =(B80-B79)/B79
7/30/14 74.68 1.32% =(B81-B80)/B80
7/31/14 72.65 -2.72% =(B82-B81)/B81
08-01-2014 72.36 -0.40% =(B83-B82)/B82
08-04-2014 73.51 1.59% =(B84-B83)/B83
08-05-2014 72.69 -1.12% =(B85-B84)/B84
08-06-2014 72.47 -0.30% =(B86-B85)/B85
08-07-2014 73.17 0.97% =(B87-B86)/B86
08-08-2014 73.06 -0.15% =(B88-B87)/B87
08-11-2014 73.44 0.52% =(B89-B88)/B88
08-12-2014 72.83 -0.83% =(B90-B89)/B89
8/13/14 73.77 1.29% =(B91-B90)/B90
8/14/14 74.3 0.72% =(B92-B91)/B91
8/15/14 73.63 -0.90% =(B93-B92)/B92
8/18/14 74.59 1.30% =(B94-B93)/B93
8/19/14 75.29 0.94% =(B95-B94)/B94
8/20/14 74.81 -0.64% =(B96-B95)/B95
8/21/14 74.57 -0.32% =(B97-B96)/B96
8/22/14 74.57 0.00% =(B98-B97)/B97
8/25/14 75.02 0.60% =(B99-B98)/B98
8/26/14 75.96 1.25% =(B100-B99)/B99
8/27/14 74.63 -1.75% =(B101-B100)/B100
8/28/14 73.86 -1.03% =(B102-B101)/B101
8/29/14 74.82 1.30% =(B103-B102)/B102
09-02-2014 76.68 2.49% =(B104-B103)/B103
09-03-2014 75.83 -1.11% =(B105-B104)/B104
09-04-2014 75.95 0.16% =(B106-B105)/B105
09-05-2014 77.26 1.72% =(B107-B106)/B106
09-08-2014 77.89 0.82% =(B108-B107)/B107
09-09-2014 76.67 -1.57% =(B109-B108)/B108
09-10-2014 77.43 0.99% =(B110-B109)/B109
09-11-2014 77.92 0.63% =(B111-B110)/B110
09-12-2014 77.48 -0.56% =(B112-B111)/B111
9/15/14 74.58 -3.74% =(B113-B112)/B112
9/16/14 76.08 2.01% =(B114-B113)/B113
9/17/14 76.43 0.46% =(B115-B114)/B114
9/18/14 77 0.75% =(B116-B115)/B115
9/19/14 77.91 1.18% =(B117-B116)/B116
9/22/14 76.8 -1.42% =(B118-B117)/B117
9/23/14 78.29 1.94% =(B119-B118)/B118
9/24/14 78.54 0.32% =(B120-B119)/B119
9/25/14 77.22 -1.68% =(B121-B120)/B120
9/26/14 78.79 2.03% =(B122-B121)/B121
9/29/14 79 0.27% =(B123-B122)/B122
9/30/14 79.04 0.05% =(B124-B123)/B123
10-01-2014 76.55 -3.15% =(B125-B124)/B124
10-02-2014 77.08 0.69% =(B126-B125)/B125
10-03-2014 77.44 0.47% =(B127-B126)/B126
10-06-2014 77.56 0.15% =(B128-B127)/B127
10-07-2014 76.29 -1.64% =(B129-B128)/B128
10-08-2014 77.52 1.61% =(B130-B129)/B129
10-09-2014 75.91 -2.08% =(B131-B130)/B130
10-10-2014 72.91 -3.95% =(B132-B131)/B131
10/13/14 72.99 0.11% =(B133-B132)/B132
10/14/14 73.59 0.82% =(B134-B133)/B133
10/15/14 73.21 -0.52% =(B135-B134)/B134
10/16/14 72.63 -0.79% =(B136-B135)/B135
10/17/14 75.95 4.57% =(B137-B136)/B136
10/20/14 76.95 1.32% =(B138-B137)/B137
10/21/14 78.69 2.26% =(B139-B138)/B138
10/22/14 78.37 -0.41% =(B140-B139)/B139
10/23/14 80.04 2.13% =(B141-B140)/B140
10/24/14 80.67 0.79% =(B142-B141)/B141
10/27/14 80.28 -0.48% =(B143-B142)/B142
10/28/14 80.77 0.61% =(B144-B143)/B143
10/29/14 75.86 -6.08% =(B145-B144)/B144
10/30/14 74.11 -2.31% =(B146-B145)/B145
10/31/14 74.99 1.19% =(B147-B146)/B146
11-03-2014 73.88 -1.48% =(B148-B147)/B147
11-04-2014 75.76 2.54% =(B149-B148)/B148
11-05-2014 74.83 -1.23% =(B150-B149)/B149
11-06-2014 75.26 0.57% =(B151-B150)/B150
11-07-2014 75.6 0.45% =(B152-B151)/B151
11-10-2014 75 -0.79% =(B153-B152)/B152
11-11-2014 74.61 -0.52% =(B154-B153)/B153
11-12-2014 74.72 0.15% =(B155-B154)/B154
11/13/14 74.25 -0.63% =(B156-B155)/B155
11/14/14 74.88 0.85% =(B157-B156)/B156
11/17/14 74.24 -0.85% =(B158-B157)/B157
11/18/14 74.34 0.13% =(B159-B158)/B158
11/19/14 73.33 -1.36% =(B160-B159)/B159
11/20/14 73.6 0.37% =(B161-B160)/B160
11/21/14 73.75 0.20% =(B162-B161)/B161
11/24/14 74.01 0.35% =(B163-B162)/B162
11/25/14 75.63 2.19% =(B164-B163)/B163
11/26/14 77.62 2.63% =(B165-B164)/B164
11/28/14 77.7 0.10% =(B166-B165)/B165
12-01-2014 75.1 -3.35% =(B167-B166)/B166
12-02-2014 75.46 0.48% =(B168-B167)/B167
12-03-2014 74.88 -0.77% =(B169-B168)/B168
12-04-2014 75.24 0.48% =(B170-B169)/B169
12-05-2014 76.36 1.49% =(B171-B170)/B170
12-08-2014 76.52 0.21% =(B172-B171)/B171
12-09-2014 76.84 0.42% =(B173-B172)/B172
12-10-2014 76.18 -0.86% =(B174-B173)/B173
12-11-2014 77.73 2.03% =(B175-B174)/B174
12-12-2014 77.83 0.13% =(B176-B175)/B175
12/15/14 76.99 -1.08% =(B177-B176)/B176
12/16/14 74.69 -2.99% =(B178-B177)/B177
12/17/14 76.11 1.90% =(B179-B178)/B178
12/18/14 78.4 3.01% =(B180-B179)/B179
12/19/14 79.88 1.89% =(B181-B180)/B180
12/22/14 81.45 1.97% =(B182-B181)/B181
12/23/14 80.61 -1.03% =(B183-B182)/B182
12/24/14 80.77 0.20% =(B184-B183)/B183
12/26/14 80.78 0.01% =(B185-B184)/B184
12/29/14 80.02 -0.94% =(B186-B185)/B185
12/30/14 79.22 -1.00% =(B187-B186)/B186
12/31/14 78.02 -1.51% =(B188-B187)/B187
01-02-2015 78.45 0.55% =(B189-B188)/B188
01-05-2015 77.19 -1.61% =(B190-B189)/B189
01-06-2015 76.15 -1.35% =(B191-B190)/B190
01-07-2015 76.15 0.00% =(B192-B191)/B191
01-08-2015 78.18 2.67% =(B193-B192)/B192
01-09-2015 77.74 -0.56% =(B194-B193)/B193
01-12-2015 76.72 -1.31% =(B195-B194)/B194
1/13/15 76.45 -0.35% =(B196-B195)/B195
1/14/15 76.28 -0.22% =(B197-B196)/B196
1/15/15 74.05 -2.92% =(B198-B197)/B197
1/16/15 75.18 1.53% =(B199-B198)/B198
1/20/15 76.24 1.41% =(B200-B199)/B199
1/21/15 76.74 0.66% =(B201-B200)/B200
1/22/15 77.65 1.19% =(B202-B201)/B201
1/23/15 77.83 0.23% =(B203-B202)/B202
1/26/15 77.5 -0.42% =(B204-B203)/B203
1/27/15 75.78 -2.22% =(B205-B204)/B204
1/28/15 76.24 0.61% =(B206-B205)/B205
1/29/15 78 2.31% =(B207-B206)/B206
1/30/15 75.91 -2.68% =(B208-B207)/B207
02-02-2015 74.99 -1.21% =(B209-B208)/B208
02-03-2015 75.4 0.55% =(B210-B209)/B209
02-04-2015 75.63 0.31% =(B211-B210)/B210
02-05-2015 75.61 -0.03% =(B212-B211)/B211
02-06-2015 74.47 -1.51% =(B213-B212)/B212
02-09-2015 74.44 -0.04% =(B214-B213)/B213
02-10-2015 75.19 1.01% =(B215-B214)/B214
02-11-2015 76.51 1.76% =(B216-B215)/B215
02-12-2015 76.23 -0.37% =(B217-B216)/B216
2/13/15 75.74 -0.64% =(B218-B217)/B217
2/17/15 75.6 -0.18% =(B219-B218)/B218
2/18/15 76.71 1.47% =(B220-B219)/B219
2/19/15 79.42 3.53% =(B221-B220)/B220
2/20/15 79.9 0.60% =(B222-B221)/B221
2/23/15 78.84 -1.33% =(B223-B222)/B222
2/24/15 78.45 -0.49% =(B224-B223)/B223
2/25/15 79.56 1.41% =(B225-B224)/B224
2/26/15 80.41 1.07% =(B226-B225)/B225
2/27/15 78.97 -1.79% =(B227-B226)/B226
03-02-2015 79.75 0.99% =(B228-B227)/B227
03-03-2015 79.6 -0.19% =(B229-B228)/B228
03-04-2015 80.9 1.63% =(B230-B229)/B229
03-05-2015 81.21 0.38% =(B231-B230)/B230
03-06-2015 80.01 -1.48% =(B232-B231)/B231
03-09-2015 79.44 -0.71% =(B233-B232)/B232
03-10-2015 77.55 -2.38% =(B234-B233)/B233
03-11-2015 77.57 0.03% =(B235-B234)/B234
03-12-2015 78.93 1.75% =(B236-B235)/B235
3/13/15 78.05 -1.11% =(B237-B236)/B236
3/16/15 78.07 0.03% =(B238-B237)/B237
3/17/15 79.36 1.65% =(B239-B238)/B238
3/18/15 80.91 1.95% =(B240-B239)/B239
3/19/15 82.75 2.27% =(B241-B240)/B240
3/20/15 83.8 1.27% =(B242-B241)/B241
3/23/15 84.43 0.75% =(B243-B242)/B242
3/24/15 85.31 1.04% =(B244-B243)/B243
3/25/15 82.92 -2.80% =(B245-B244)/B244
3/26/15 83.01 0.11% =(B246-B245)/B245
3/27/15 83.3 0.35% =(B247-B246)/B246
3/30/15 83.2 -0.12% =(B248-B247)/B247
3/31/15 82.22 -1.18% =(B249-B248)/B248
04-01-2015 81.67 -0.67% =(B250-B249)/B249
04-02-2015 81.56 -0.13% =(B251-B250)/B250
Volatility (%)
1.80%
=STDEV.S(C3:C251)
Annualized Volatility (%) 28.44% =SQRT(250)*D252

2.) Calculation of call option price using blackscholes model:

Assumption : For risk free rate, latest rate for US treasury considerred.

Call option price = $4.81

Formula:

3.) Implied volatiltiy

As the market value of option is $4.81 and the value derived using the blackscholes model is also $4.81, the implied volatility is 28.44%

jeff jeffy answered 1 year ago
Next > < Previous

Related Solutions

In order to submit this assignment, you will use this webform to upload a document file...
In order to submit this assignment, you will use this webform to upload a document file (.doc) or (.docx) with your answers. If you need to make a graph you may use a drawing program or sketch by hand. Report your source in APA or MLA format. Be sure that your responses model clear economic reasoning and addresses each of the following: What are the advantages and disadvantages of a fixed exchange rate? What are the advantages and disadvantages of...
In order to submit this assignment, you will use this webform to upload a document file...
In order to submit this assignment, you will use this webform to upload a document file (.doc) or (.docx) with your answers. If you need to make a graph you may use a drawing program or sketch by hand. Report your source in APA or MLA format. Be sure that your responses model clear economic reasoning and addresses each of the following: What is the effect of expansionary fiscal policy on unemployment and inflation? Go online and find an article...
In order to submit this assignment, you will use this webform to upload a document file...
In order to submit this assignment, you will use this webform to upload a document file (.doc) or (.docx) with your answers. You may use a drawing program or sketch by hand. Be sure that your responses model clear economic reasoning and addresses each of the following: 1.) Suppose if the price of a good is $12, the quantity demanded is 50 units; when the price is $10, the quantity demanded is 100 units. Use the midpoint approach to compute...
Read the assignment and answer the questions. You must also upload your Excel file, Word document...
Read the assignment and answer the questions. You must also upload your Excel file, Word document or pdf showing your work. Bodacious Building Co. is considering four different acquisition methods for obtaining pickup trucks. If the contractor’s MARR is 6%, which alternative do you recommend? The alternatives are: Immediate cash purchase of the trucks for $22,500 each, and after five years sell each truck for an estimated $4,900. Lease the trucks for five years for $4,000 per year paid at...
For this assignment, you will read the scenario and then use the provided Excel and Word...
For this assignment, you will read the scenario and then use the provided Excel and Word document templates to complete your assignment before uploading them to the assignment submission area. Scenario Larry and Beth are both married, working adults. They both plan for retirement and consider the $6,000 annual contribution a must. First, consider Beth's savings. She began working at age 20 and began making an annual contribution to her IRA of $6,000 each year until age 32 (12 contributions)....
Upload an Excel spreadsheet or use the indirect method showing the cash flows of the investment...
Upload an Excel spreadsheet or use the indirect method showing the cash flows of the investment for the € 400.000 investment. Discuss your findings in about 100 words. ( note : you have to assume the numbers and how you want to invest ) Estimate/calculate the overall rate of return (WACC) for the € 400.000 investment based on your personal assumptions. How are you going to finance this investment? Discuss about the capital structure mix you have chosen and how...
Suppose you use a call spread strategy on 4/15/2020, by buying a Facebook call option with...
Suppose you use a call spread strategy on 4/15/2020, by buying a Facebook call option with the strike price of $180 at $7 and selling a Facebook call option with the strike price of $195 at $2. Both call options mature on 5/15/2020. What is your total payoff and profit if Facebook share is traded at $170 on 5/15/2020 and what is your total payoff and profit if Facebook share is traded at $185 on 5/15/2020?
Suppose you use a call spread strategy on 4/15/2020, by buying a Facebook call option with...
Suppose you use a call spread strategy on 4/15/2020, by buying a Facebook call option with the strike price of $180 at $7 and selling a Facebook call option with the strike price of $195 at $2. Both call options mature on 5/15/2020. What is your total payoff and profit if Facebook share is traded at $170 on 5/15/2020? What is your total payoff and profit if Facebook share is traded at $185 on 5/15/2020? What is your total payoff...
Suppose you use a call spread strategy on 4/15/2020, by buying a Facebook call option with...
Suppose you use a call spread strategy on 4/15/2020, by buying a Facebook call option with the strike price of $180 at $7 and selling a Facebook call option with the strike price of $195 at $2. Both call options mature on 5/15/2020. (a) What is your total payoff and profit if Facebook share is traded at $170 on 5/15/2020? (b) What is your total payoff and profit if Facebook share is traded at $185 on 5/15/2020? (c) What is...
FINANCE ASSIGNMENT **THIS ASSIGNMENT REQUIRES THE USE OF MICROSOFT EXCEL** Refer to information page on the...
FINANCE ASSIGNMENT **THIS ASSIGNMENT REQUIRES THE USE OF MICROSOFT EXCEL** Refer to information page on the use of some finance features in Excel. Understand financial functions @PMT, @PPMT, @IPMT, @PV and @FV. See here. 1. Assume you are employed at $60,000 per year. Consider such deductions as social security, income taxes (federal, state and county) and your payment on health benefits. Do the best you can to come to grips with what is a realistic monthly take home pay. 2....
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT