1 the market risk premium is 596 percent and the risk-free, Ask an Expert

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1. The market risk premium is 5.96 percent, and the risk-free rate is 4.39 percent. If the expected return on a bond is 6.46 percent, what is its beta? (Round answer to 2 decimal places, e.g. 15.25.)

2. You short 200 shares of FB at $90 per share, with initial margin of 60%.

Your broker's maintenance margin requirement is 35%. What must be the share price of FB for you to get a margin call?

3. Consider a stock index currently standing at 250. The dividend yied on the index is 4% per annum, and the risk free rate is 6% per annum. A three month European call option on the index with a strike price of 245 is currently worth $10. What is the value of a three month put option on the index with a strike price of 245?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92742628

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