1. (Pricing a forward contract with dividends)The current price of silver is $206 per ounce. The storage cost is $1 ounce per year, payable quarterly in advance.Assuming a constant annual interest rate of 9% compounded quarterly, what is the theoretical forward price ofsilver for delivery in 9 months?Please submit your answer rounded to the nearest integer - for example, if your answer is 19.8, round it to either20.Enter answer here2. (Pricing Call Options)Consider a 1-period binomial model with R = 1.05, So = 50, u = 1/d = 1.08. What is the value of a Europeancall option on the stock with strike K = 52, assuming that the stock does not pay dividends?Please submit your answer rounded to two decimal places. So for example, if your answer is 5.489 then you shouldsubmit an answer of 5.48 or 5.49.Enter answer here

Given: price of silverP=$206 per ounce, storage costC=$1 ounce per year, interest rater=9%…

The current price of silver is $206 per ounce. The storage cost is $1 ounce per year, payable quarterly in advance. Assuming a constant annual interest rate of 9% compounded quarterly, what is the theoretical forward price of silver for delivery in 9 months? Please submit your answer rounded to the nearest integer - for example, if your answer is 19.8, round it either 20. Enter answer here

The current price of silver is $206 per ounce. The storage cost is $1 ounce per year, payable quarterly in advance. Assuming a constant annual interest rate of 9% compounded quarterly, what is the theoretical forward price of silver for delivery in 9 months? Please submit your answer rounded to the nearest integer - for example, if your answer is 19.8, round it either 20. Enter answer here

Algebra and Trigonometry (6th Edition)

6th Edition

ISBN:9780134463216

Author:Robert F. Blitzer

Publisher:Robert F. Blitzer

ChapterP: Prerequisites: Fundamental Concepts Of Algebra

Section: Chapter Questions

Problem 1MCCP: In Exercises 1-25, simplify the given expression or perform the indicated operation (and simplify,...

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Question

1. (Pricing a forward contract with dividends)
The current price of silver is $206 per ounce. The storage cost is $1 ounce per year, payable quarterly in advance.
Assuming a constant annual interest rate of 9% compounded quarterly, what is the theoretical forward price of
silver for delivery in 9 months?
Please submit your answer rounded to the nearest integer - for example, if your answer is 19.8, round it to either
20.
Enter answer here
2. (Pricing Call Options)
Consider a 1-period binomial model with R = 1.05, So = 50, u = 1/d = 1.08. What is the value of a European
call option on the stock with strike K = 52, assuming that the stock does not pay dividends?
Please submit your answer rounded to two decimal places. So for example, if your answer is 5.489 then you should
submit an answer of 5.48 or 5.49.
Enter answer here

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