Onyx Corporation has a S200, 000 loan that will mature in one year. The riskfree interest rate is 6 percent. The standard deviation in the rate of changein the underlying asset's value is 12 percent, and the leverage ratio for Onyxis 0.8 (80 percent) . The value for N(hl) is 0.02743, and the value for N(h2)is 0.96406. What is the current market value of the loan?

Suppose the term structure of risk-free interest rates is as shown below: 5 yr 7 yr 10 yr 20 yr Term 1 уг 2 yr 3 yr 3.24 3.79 4.09 5.05 2.07 2.46 2.71 Rate (EAR %) a. Calculate the present value of an investment that pays $1,000 in two years and $3,000 in five years for certain. b. Calculate the present value of receiving $100 per year, with certainty, at the end of the next five years. To find the rates for the missing years in the table, linearly interpolate between the years for which you do know the rates. (For example, the rate in year 4 would be the average rate in year 3 and year 5.) c. Calculate the present value of receiving $1,800 per year, with certainty, for the next 20 years. Infer rates for the missing years using linear interpolation. (Hint: Use a spreadsheet.)

Assume that the spot price of an underlying asset is Php250 and suppose the 10% is the annual risk-free interest rate. At equilibrium, the 6-month forward price of the underlying asset should be nearest to Php275.00 Php262.50 Php256.25 Php250.00

B. J. Gautney Enterprises is evaluating a security. ​ One-year Treasury bills are currently paying 2.9 percent. Calculate the​ investment's expected return and its standard deviation. Should Gautney invest in this​ security? Probability Return0.15 -3%0.30 2%0.40 4%0.15 6%   The​ investment's standard deviation is _______ % . round to two decimal places

Suppose that the 9-month and 12-month LIBOR rates are 4% and 4.2%, respectively. What is the value of an FRA where 5% is received and LIBOR is paid on £1 million for the quarterly period? All rates are quarterly compounded and expressed as per annum. Assume that LIBOR is used as the risk-free discount rate. Select one: a. £478.115 b. £422.870 c. £479.062 d. £426.132

Suppose that yield rates on zero coupon bonds are currently 26 for a one-year maturity, 3% for a two-year maturity and 4.% for a three-year maturity (all effective annual rates). Suppose that someone is willing to borrow money from you starting one year from now to be repaid three years from now at an effective annual interest rate of 6.5146438635186%. Construct a transaction in which an arbitrage gain can be obtained. What is your positive net gain for net investment of 0? (net cashflow at t-3) 01345 One possible correct answer is: 0.030250290387703

An investment pays 3000 in one year, 2000 at the end of the second year and 1000 at the end of the third year. It is priced to yield 8% annually. Find a) the current price b) the exact change in value if rates go down to 7.95% c) the approximate change in price using the first order derivative d) the approximate change in price using both the first order derivative and second order derivatives

Assume that the risk free-rate yield curve is flat at 4% (with continuous compounding). The payoff from a derivative occurs in 4 years. It is equal to the 6-year rate minus the 2-year rate at this time, applied to a principal of $10 million with both rates being continuously compounded. Calculate the value of the derivative. Assume that the volatility for all rates is 20%

H4. Work out the value of European Call on a risky asset A, currently selling at $600. The European Call has a term to maturity of 1.5 years and a strike price of $675. SD(dA/A), the volatility of returns on the risky asset is 18% per year, and the discrete risk-free rate is 0.9% per year

Borrower Inc. is currently estimating the value of its bonded indebtedness with the following information: Real risk-free rate is currently estimated at 4.25% The expected inflation premium is at 1.75% Considering the current creditworthiness of Borrower Inc., it's credit spread is estimated at: 2.0% for 3-year maturity instruments 3.0% for 4-year maturity instruments 4.0% for 5-year maturity instruments Borrower Inc. have the following issued bonded indebtedness: Bond A carries a 5-year tenor with a face value of Php500,000 issued 2 years ago carrying a coupon of 8.0% per annum. Bond B carries a 5-year tenor with a face value of Php600,000 issued a year ago carrying a coupon of 10.0% per annum. Bond C carries a 8-year tenor with a face value of Php400,000 issued 3 years ago carrying a coupon of 11.5% per annum. 1. What is the value of Bond A? Clue - correct answer should have a string of number "00" appearing in sequence in any unit until two decimal points. 2. What is the…