At age 60, David decides to stop paying premiums on his $60,000 whole life policy and exchanges it for extended term insurance. What face value will the term insurance have?

What is the term for the conditional mean of the probability distribution of future spot rates?

A) the expected swap rate B) the future exchange rate C) the outright rate D) the expected future spot rate

The current market value of the assets of levered firm ABC, Inc is $100 million. The annual standard deviation of returns on the assets is 30%

The firm's capital structure consists of equity and pure discount debt for which payment of $80 million is due in 5 years. The risk-free rate is 5%. Using the Black-Scholes Option Pricing Model to calculate the value of the firm's debt. a. $44 b. $55 c. $66 d. $77 (The BSOPM formula and cumulative normal distribution function values must be supplied.)