A firm with assets value at $500,000 issues a 6 year zero-coupon bond with a par value of $550,000. Using a put option approach, what is the value of the defaultable bond given r = .07,
volatility is given as .33 and there is no dividend paid by the company?
A)
$75,970
B)
$245,601
C)
$285,406
D)
$361,376
Answer:
C
Business
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The soda machines have become self aware and when they are not in use dispensing ice-cold beverages, they are busy formulating a plan for world domination. About how much time over the course of a week can they develop their battle plans?
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