Birthday is 01/21/1985

Problem 2 trading volume for an option contract, use the average of the contract's bid and ask prices to measure the last trade price.) Part A Consider a bond with a settlement date of MM/DD/2018 (E.g., February 23, 2018), where MM/DD corresponds to the month and day of your birthday. The maturity of the bond is March 15, 2026. The coupon rate is 6.5%. If the yield to maturity of the bond is 5.34% (bond equivalent yield, semiannual compounding), what is the list price of the bond on the settlement date? What is the accrued interest on the bond? What is the invoice price of the bond? A. Write a formula in Excel for the Black-Scholes option value of a call, and then use either Solver or Goal Seek to calculate the implied volatility for each of the ten call options. In your calculations, you can assume the following: Dividend yield is zero Annualized, continuously-compounded risk-free rate is equal to the 1-year Treasury rate (see www.treasury.gov for data). Part B Now suppose the bond in the previous question is selling for 102% of face value. What is the bond's yield to maturity? What would the yield to maturity be at a price of 102% of face value, if the bond pays its coupons only once a year? B. Compare the implied volatilities you calculated against the ones reported in Yahoo Finance. Are they the same? If not, what might explain the discrepancy? Problem 3: C. Graph the implied volatilities for the 10 options against the moneyness of the contract (measured as the ratio of stock price to option strike price). Describe the shape of your graph. Based on the results, what can you say about market demand for the different options and about the accuracy of your Black-Scholes calculation? Let M be the month of your birthday Define D= M if M> 5; and D=M + 5 if M 5; and D=M + 5 if M