Question
In: Finance
Apple currently trades at $438. 1.Ignoring the time value of money, what is your total profit...
Apple currently trades at $438.
1.Ignoring the time value of money, what is your total profit with a stock price of $426?
2.What is your total profit if you consider the time value of money? The risk-free rate is 0.01 (EAR).
Solutions
Expert Solution
1)Profit = current price- stock price
= 438 - 426
=$ 12
2)stock price if time value of money is considered = stock price(1+risk free rate)
= 426(1+.01)
= 430.26
Profit = 438-430.26
= $ 7.74
jeff jeffy answered 1 year agoRelated Solutions
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