Question
hsbc is designing a new saving product that is linked to FTSE100. The product pays the customer 5% if the return of FTSE100 in the
hsbc is designing a new saving product that is linked to FTSE100. The product pays the customer 5% if the return of FTSE100 in the coming year exceeds a threshold value b, and pays 0 otherwise. Market survey suggests that such a product is attractive only when its expected average return exceeds 2%. What should value b be?
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Finite Mathematics and Its Applications
Authors: Larry J. Goldstein, David I. Schneider, Martha J. Siegel, Steven Hair
12th edition
978-0134768588, 9780134437767, 134768582, 134437764, 978-0134768632
