A B 1 2 3 INPUT Stock Price Strike Price Life of the Option Risk Free Rate Standard Deviation 4 $ 100.00 5 $ $ 95.00 6 0.25 7 0.07 8 0.20 9 10 11 OUTPUT 12 Black-Scholes Model $ 8.056 $ $ 1.408 13 Call 14 Put $ 15 N

Compute the Profitability Index (PI)  for each project?   Project A Project B Profitability Index (PI)      5- In light of your answers above, suppose that these two projects might be mutually exclusive or independent. According to these two assumptions, fill in the blanks in the table below with the suitable answer:   Points Investment Criteria If A and B are mutually exclusive, then I would select If A and B are independent, then I would select   PBP       NPV       IRR       PI

When faced with a set of independent projects, one should select (choose the best answer) all projects with a PI greater than one. all projects with an IRR greater than the hurdle rate all projects with a positive NPV or an IRR greater than the hurdle rate or a PI greater than one. all projects with a positive NPV or an IRR greater than the hurdle rate. all projects with an IRR greater than the hurdle rate or a PI greater than one. all projects with a positive NPV or a PI greater than the one. all projects with a positive NPV

I have been working on the question below and I'm stuck on how to finish it up.  I have provided what I've done so far.  Is what I've done so far correct?  And how do I finish up the problem? Here is the question: Suppose that C is the price of a European call option to purchase a security whose present price is S. Show that if C>S then there is an opportunity for arbitrage (i.e. risk-less profit). You may assume the interest rate is r=0 so that the present value calculations are unnecessary. My work so far: There is an opportunity for arbitrage if we can create a portfolio that initially (time t=0) generates a zero net cash flow or a cash inflow, but still produce a positive or zero cash inflow at the time of expiration. Assume we are going to short sell one call option C, and buy one stock S. Consider the cash flows at time t=0.Cash flow of selling one call option: +CCash flow of buying one stock: -STherefore, since C>S, we have an initial cash inflow of C-S>0. We will now…

Why did Fama and French introduce three-factor model in place of CAPM?

help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all working