Explain concept of company debt associated to strike price
Who introduced the concept of company’s debt associated to the strike price and the maturity of the debt?
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1974 Merton, again In 1974 Robert Merton introduced the idea of modelling the value of a company as a call option on its assets, along with the company’s debt being associated to the strike price and the maturity of the debt being the options expiration.
What is dynamically hedge?
Explain the purpose of alpha and beta in Capital Asset Pricing Model.
What is meant through the terminology that an option is in-, at-, or out-of-the-money? A call (put) alternative with St > E (E > St) is referred to as trading in-the-money. If St Nor
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Where is Crash Metrics Applicable?
How is Crash Metrics deal?
Would exchange rate alter always enhance the risk of foreign investment? Describe the condition under which exchange rate changes may in fact reduce the risk of foreign investment. Exchange rates changes require no
Explain Semi-strong form efficiency in Efficient Markets Hypothesis.
Company A is a AAA-rated firm wanting to issue five-year FRNs. It determines that it can issue FRNs at six-month LIBOR + 1/8 percent or at the six-month Treasury-bill rate + ½ percent. Specified its asset structure, LIBOR is the preferred index. Comp
What is the Capital Asset Pricing Model?
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