Compounding is one type of word formation by combining both free morphemes and bound m
A、A deferred annuity.
B、An ordinary annuity.
C、An annuity due
D、A delayed annuity.
A、Finding the present value and compounding are the same.
B、A dollar today and a dollar in one year are not equivalent.
C、If you want to compare or combine cash flows that occur at different points in time, you first need to convert the cash flows into the same units or move them to the same point in time.
D、The equivalent value of two cash flows at two different points in time is sometimes referred to as the time value of money.
A、we cannot compare simply the return of Yu'ebao and the stated annual percentage rate of 4.2% for 1-year fixed deposit (1年期定期存款)
B、the rate of return of Yu'ebao in one year is certainly 4.2%
C、the return can be computed by summing up daily earnings per RMB in past 7 days and then compounding the sum for 52 weeks
D、the return is 12 times of the interest rate of demand deposits (活期存款) with a stated annual percentage rate of 0.35%
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.
Section B
Directions: There are 2 passages in this section. Each passage is followed by some questions or unfinished statements. For each of them there are four choices marked A, B, C and D. You should decide on the best choice.
The number of parents teaching their offspring at home will increase if the current public school system continues to be viewed as an irrelevant institution that can hinder a child's ability to learn.
The rise of home-schooling reflects broadening dissatisfaction with formal education in the US. Discontent is high for two reasons. First, public schools are turning out a poor product--illiterate and unprepared graduates. For example, American 13-year-olds have been documented as having math skills that rank below their counterparts in 14 other developed countries. One survey noted that just one-third of high school juniors could place the Civil War in the correct half-century. Equally troubling, public schools have become scenes where drugs are sold, teachers are robbed, and homemade bombs are found in lockers.
Compounding the situation, teachers' unions, school officials, and many politicians adamantly(坚决地) oppose the use of public monies(钱) for innovative solutions, such as vouchers and charter schools. Those alternatives, although not a panacea(万能) for all the present problems, are at least promising vehicles that could help poor and middle-income parents to find better schools for their children and break up the monopoly of a "one-size-fits-all" philosophy of education.
In light of the educational quagmire(沼泽) the US finds itself in, many parents, impatient for reform, are taking matters into their own hands. One alternative that is gaining growing public acceptance is the educational option known as home-schooling. Home-schooling is defined simply as the "education of school-aged children at home rather than at a school". Home-schoolers believe that students who receive instruction simultaneously from the home and the community at large will be more culturally sophisticated than those whose bulk of learning experience is confined to a school. Home-schooling families believe they are using their liberties well and wisely. The American can-do spirit is evident in the home-schools and households parents manage simultaneously. Those families, however, could use some further deregulation, be it through home-school tax credits or a loosening of compulsory attendance school laws, to make their task easier.
According to the text, the number of children being schooled at home has increased because ______.
A.children don't want to go to school
B.parents are dissatisfied with pubic schools
C.home-schooled children learn better
D.public schools are too crowded
Compounding is the process of creating new words by combining affixes and bases.()
A.blending
B.compounding
C.clipping
D.conversion
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