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In the table below, information about the market index, asset X and the risk-free asset on a given normal market are stated. The risk-free rate
In the table below, information about the market index, asset X and the risk-free asset on a given normal market are stated. The risk-free rate next year is 0,5%.
Does anyone know how to solve for this?
Unknown problem no. 3 In the table below, information about the market index, asset X and the risk-free asset on a given normal market are stated. The risk-free rate next year is 0,5%. DKK Asset Market price (DKK) today (t=0) 1,000 ? ? Market index Asset X Risk-free asset Cash flow year 1 Boom (P = 50%) 1,400 750 650 Recession (P = 50%) 800 150 650 In which interval is the price (DKK) of asset X? (Hint: First determine the price of the risk-free asset) A. B. C. *D. [610; 630] ]180; 200) 1640; 690) (340; 360) [310; 330] [290, 310] E. FStep by Step Solution
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