Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Basic Finance Expert

Question: If you construct a hedged portfolio that provides a payoff of $100 thousand in one year for all the economic condition of the market, what is the discount rate that you are going to use to find the present value of the payoff? Give reasons for your selection of the discount rate.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M92798761

Have any Question?


Related Questions in Basic Finance

Deyoung entertainment enterprises is considering replacing

DeYoung Entertainment Enterprises is considering replacing the latex molding machine it uses to fabricate rubber chickens with a newer, more efficient model. The old machine has a book value of $450,000 and a remaining u ...

Background information for the next two problems solar home

Background information for the next two problems. Solar Home Inc. is interested in estimating its sustainable sales growth rate. Last year revenues were $1 million, the net profit was $50,000, the investment in assets wa ...

You manage an equity fund with an expected risk premium of

You manage an equity fund with an expected risk premium of 13% and a standard deviation of 44%. The rate on Treasury bills is 6.6%. Your client chooses to invest $90,000 of her portfolio in your equity fund and $60,000 i ...

Assignment - tax issues associated with financial

Assignment - Tax Issues Associated with Financial Planning Understanding the tax consequences of your financial planning decisions is very important. These decisions may sometimes have life-long consequences in addition ...

If you pay 55 for a share of common stock that has a

If you pay $55 for a share of common stock that has a constant growth rate of 6% and it is expected to pay a dividend of $1.25 what would be your return (hint: solve for kc and be careful about the dividend - it has alre ...

On january 11998 the total assets of the mccue company were

On January 1,1998, the total assets of the McCue company were $270 million. The first present capital structure, which follows, is considered optimal. Assume that they have no short-term debt. Long-term debt              ...

What is variance risk premium why variance risk premium is

What is variance risk premium? Why variance risk premium is in general positive?

Based on your review of the financial statements of company

Based on your review of the financial statements of Company A and B, suggest a key insight about the financial health of the companies.

A what is meant by private company the features of private

a) What is meant by private company? the features of private company. b) What is Insurance id a kind of investment. c) What is memorandum of association?

Steve has purchased a treasury bill with a 182-day maturity

Steve has purchased a Treasury bill with a 182-day maturity and a $10,000 par value for $9,645. Ninety-two days later, Steve sells the T-bill for $9,719. Determine Steve's expected annualized yield from this transaction.

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As