Given the promised coupon, the principal amount the probability of default, and the payment under default, determine the expected payment from the bond.
Your numbers will vary.
What is the most important difference between a corporate bond and a Treasury bond issued by the U.S. Treasury?
Given the bond’s promised coupon in dollar terms, the principal payment and the price that the investor buys the bond for, determine the bond’s promised yield.
Your numbers will vary.
Concept only: The value of a bond = ______ – ___________. You are given asset value, call option on assets, default-free bond, and value of put option on assets. What are words that would fit into the above?
We can think of the value of a corporate bond as Bond value without default +/- ______.
Determine the bond’s promised yield to maturity and the expected yield given the likelihood of default and payment under default.
Your numbers will vary.
Calculate the present value of the company’s debt and equity using the Black-Scholes model.
Your numbers will vary.
Which statement is definitively true for the owner of a September put on CBA Corp. with an $80 exercise price, where CBA stock is currently trading at $80 and the put is priced at $5?
Determine which two indices exhibited the highest correlation over the period from 2017 to 2021. Choose from the following pairs: S&P and DJIA, S&P and Russell 2000, DJIA and Russell 2000, S&P and NASDAQ 100, NASDAQ 100 and DJIA.
For the owner of a June call on XYZ Corp. with a $60 exercise price and a current stock price of $55, where the option is priced at $3, which statement is accurate?