Question
1.Two years from today, a company will produce cash flows of either $4 million (with probability = 0.4) or $1 million. r=15% a. In expectation,
1.Two years from today, a company will produce cash flows of either $4 million (with probability = 0.4) or $1 million. r=15% a. In expectation, how much will the company produce? b. What is the company worth today?
2. Your friend agrees to pay you $1,000 if Biden wins re-election exactly 4 years from today. You agree to pay $2,500 if he does not win. r=20%. Assume that the bet is fair, and neither of you requires payment today to incentivize you to make the bet. What must be the probability that Biden wins re-election?
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The Handbook Of Traditional And Alternative Investment Vehicles Investment Characteristics And Strategies
Authors: Mark J. P. Anson, Frank J. Fabozzi, Frank J. Jones
1st Edition
0470609737, 978-0470609736
