Question IV: Suppose S=$100, K =$95, r = 8% (continuously compounded), t=1, o =30%, and 8-5%. Use an eight- period lognormal binomial tree to answer the following questions. You can also use Excel for this question. If you do so, please upload the Excel file separately with the detailed calculations. (a) Construct the stock tree. (b) Compute the prices of an European call option. (c) Compute the prices of an American put option.
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- Using Excel or a spreadsheet of your choice, create interest–time factor tables, similar to Table 20.9 , for i = 6 5% and i = 6 75% .Answers are : A = 1.97, B = 4.61, C = 8.35, D = 14.13 Please show step by step calculation with formulasState the purpose for each of the following six built-in spreadsheet functions. (a) PV(i%, n, A, F) (b) FV(i%, n, A, P) (c) RATE(n, A, P, F) (d ) IRR(first_cell:last_cell) (e) PMT(i%, n, P, F) ( f ) NPER(i%, A, P, F)
- What do you understand by TVM principle? Differentiate between commands of PV, PMT & FV in excel & explain with syntax and arguments. Solve for both PV & FV if CF is 3000, N is 5 and interest is 7%. Make Proper table to calculate both FV & PV step-wisea. Calculate the expected value of return, i, for the asset. Data Table (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Return, r 40.00% Pr 1 0.10 10.00% 0.00% 2 0.20 3 0.40 0.20 - 5.00% 0.10 - 10.00% Print DoneFor the following five spreadsheet functions, (a) write the values of the engineering economy symbols P, F, A, i, and n, using a ? for the symbol that is to be determined, and (b) state whether the displayed answer will have a positive sign, a negative sign, or it can’t be determined from the entries. (1) = FV(8%, 10, 3000, 8000) (2) = PMT(12%, 20, –16000) (3) = PV(9%, 15, 1000,600) (4) = NPER(10%, –290,, 12000) (5) = FV(5%, 5, 500, –2000)
- The Elberta Fruit Farm of Ontario has always hired transient workers to pick its annual cherry crop. Janessa Wright, the farm manager, just received information on a cherry picking machine that is being purchased by many fruit farms. The machine is a motorized device that shakes the cherry tree, causing the cherries to fall onto plastic tarps that funnel the cherries into bins. Ms. Wright has gathered the following information to decide whether a cherry picker would be a profitable investment for the Elberta Fruit Farm: a. Currently, the farm is paying an average of $250,000 per year to transient workers to pick the cherries. b. The cherry picker would cost $540,000. It would be depreciated using the straight-line method and it would have no salvage value at the end of its 5-year useful life. c. Annual out-of-pocket costs associated with the cherry picker would be: cost of an operator and an assistant, $80,000 insurance, $4,000; fuel, $12,000, and a maintenance contract. $15,000. Click…1. Choose three of the following five technologies/techniques and explain why you think it is helpful in accounting analytics based on your lab experience in this course. Use some examples in your explanation. Limit your answer to 500 words in total. A. XBRL B. Tableau C. VLOOKUP function D. Pivot table E. RegressionConsider the following set of dependent and independent variables. Complete parts a through c below. y 10 11 15 15 21 24 27 32 X1 2 6 6 8 6 11 17 21 X2 17 9 13 10 3 8 6 4 a. Using technology, construct a regression model using both independent variables. = + + (Round to four decimal places as needed.)
- Task 1 Using the following the data below, graph the result and use linear regression to obtain the equation of a line. y 3 1 5.5 8. 3 10.5 13 5. 15.5Solve the following problem. PV=$18,372; n = 79; i = 0.021; PMT= ?; PMT=$(Round to two decimal places.) Help me solve this View an example 4 GoPlease answer the question (ii) for i=5%. Please answer using the formula that is attached. The correct answer for (ii) i=5% is 59704. Please show step by step solution.