题目内容
（请给出正确答案）
A.par.
B.a discount.
C.a premium.
简答题官方参考答案
（由简答题聘请的专业题库老师提供的解答）
更多“An investor purchases a 5% coupon bond maturing in 15 years for par value. Immediately”相关的问题
A、carrying value.
B、original purchase price.
C、original purchase price value plus the amortized amount of the premium.
D、空
A、the desired price
B、a price at least equal to the purchase price
C、a price close to the bond's fair market value
D、空
A. Term repo rate
B. Call money rate
C. Broker loan rate
A、As long as investors can borrow or lend at the same interest rate as the firm, homemade leverage is a perfect substitute for the use of leverage by the firm.
B、When investors use leverage in their own portfolios to adjust the leverage choice made by the firm, we say that they are using homemade leverage.
C、The value of the firm is determined by the present value of the cash flows from its current and future investments.
D、The investor can re-create the payoffs of unlevered equity by borrowing and using the proceeds to purchase the equity of the firm.
Tess Mulroney, a veteran options investor, wishes to do some speculating and hedging with options, but isn’t sure the derivatives currently available are attractively priced. Before making any transactions, Mulroney puts her calculator to work to determine a fair price for the options.
First, Mulroney seeks to protect a large variable-rate investment. She has loaned $40 million to her nephew’s construction company. The loan is payable in one year, and the current interest rate is 7.6 percent. Based on data provided by her brokerage house, Mulroney believes interest rates will fall sharply over the next year, with a 70 percent chance of a decline to 5.9 percent and a 30 percent chance of a decline to 4.7 percent.
To protect her cash flows, Mulroney is considering the purchase of a 6.2 percent floor. Mulroney knows a banker who writes such options, but she must come to him with a price in mind.
Next on Mulroney’s list is call options on Merrill Materials stock. She has obtained the followingassumptions through a subscription options service:
The stock trades for $35 per share.
The chance of an upward movement over the next year is 60 percent.
The likely downward movement is 20 percent.
At-the-money calls currently sell for $4.75.
Despite her experience, Mulroney knows she always has more to learn. So she then reviews some technical material on options that she found on the Internet. Mulroney spends the next hour reading up on sensitivity factors related to option pricing.
Later that day, Mulroney meets with Ben Glanda, her financial adviser. He has prepared some investment recommendations and advice for Mulroney.
His first suggestion addresses a series of investments Mulroney was considering. She had proposed buying a stock, buying a European put option on the stock, and writing a call option. Glanda has proposed an alternative investment that will be simpler to make.
Next Glanda attempts to convince Mulroney to start using an alternate method for valuing her options. Glanda suggests using the Black-Scholes-Merton model because of its precision and ability to consider more factors, but Mulroney prefers the binomial model because it requires fewer assumptions.
Mulroney doesn’t like the Black-Scholes Merton model for the following reasons:
It does not work for American options.
It does not consider volatility of interest rates.
It does not reflect the compounding of returns.
It does not work for assets that generate cash flows.
Part 1)
Which of Mulroney’s arguments against the Black-Scholes-Merton model is least compelling？ Her statement about:
A) American options.
B) interest-rate volatility.
C) compounding returns.
D) cash flows.
A．a bank…an investor
B．a bank…a bank
C．an investor…an investor
D．an investor…a bank
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