An equally weighted index has three stocks A, B, and C priced at $10, $20, and $20 yesterday, respectively. Yesterday, stock A has a split where one share split into 2 and the price was reduced from $10 to 5. If the equally weighted index was 100 yesterday and the prices changed to $6, $18, and $17, what is the new index value? 16.11 102.54 89.6 98.33

1. Kiki Box Company produces cardboard boxes that are sold in bundles. The market is perfectly competitive, with boxes currently selling for price of $100 per bundle. Kiki’s total and marginal cost, where Q is measured in number of bundles per year, are:

TC = 2,000,000 + 0.001Q²

MC = 0.002Q

1. Calculate Kiki’s profit maximizing quantity.   
2. Calculate total profits earned by this firm.
3. Identify the fixed cost.

1. Compute the duration (D) for a coupon bond with the following features:

      ● face value            $ 100

      ● coupon                  10%

      ● yield                        8%

      ● maturity              3 years

      ● semi-annual

a.) Compute the Mac.D for Problem 1 by means of the formula.

b.) Compute the corresponding Mod.D.

c.) If the market interest rate (yield) goes up by 20 basis points to 8.2%, determine

      the approximate fair market price of this bond.

Consider a one year American put option on 100 ounces of gold with a strike of $2300 per ounce. The spot price per ounce of gold is $2300 and the annual financing rate is 7% on a continuously compounded basis. Finally, gold annual volatility is 15%. In answering the question below use a binomial tree with two steps.

A. Compute u, d, as well as p for the standard binomial model.

Data on the two products are as follows :

Total fixed costs for the manufacture of both products are $100,000.

Assuming that sales mix in terms of unit remains constant, what is the breakeven point in total revenue dollars?

In a Stackelberg duopoly, each firm has the total cost function C=40q_i, where q_i is the quantity supplied by an individual firm (i=1,2). The total market demand is given by Q = 100 - 0.5p. Firm 1 is the leader and Firm 2 is the follower.

What is the Nash-Stackelberg output level for each? What is the Nash-Stackelberg market price and quantity? What is each firm's profit?

Simple Styles is a dress manufacturer. The company purchases fabric with a list price of $200 per bolt and pays shipping charges of $3 per bolt. Each bolt contains 100 yards of fabric. Simply Styles receives a volume discount of 15% per bolt. Each dress uses a standard quantity of 2 yards of fabric.

Please:

Calculate the standard cost of material for one dress.

Consider the following strategy: Long in April $110 put, premium = $2.50 and long in April $115 call, premium = $2.75.

1. What type of strategy is this and what price expectations does it suggest? Is it similar to any other combination strategy?
2. Evaluate the payoff for 100 share contracts if the prices at maturity are $95 and $130.
3. Diagram the payoff profile for the strategy. Label the break-even prices (including premia).