Netflix Inc. (NFLX) currently trades for $500 a share. A 3-month at-the-money call option on NFLX trades for $25. All options are European and NFLX pays no dividends. The interest rate is 1% with continuous compounding.

a. What is the adjusted intrinsic value of the 3-month call option?

b. What is the no-arbitrage price of a 3-month at-the-money put option on NFLX?

c. If the put option in (b) is trading for $24, is there an arbitrage opportunity and if so, what securities would you buy and/or sell to take advantage of it?

Assignments > 6. Compound Interest mpound Interest day by 11:59pm Points 100 Submitting an external tool Question Bank D pays 7.289% effective annual yield, on an investment account in which interest is compounded weekly. What is the annual interest rate before compounding? Enter your answer as a percent, rounded to the nearest four decimals, without the % sign. (9.34562% should be input as 9.3456.) Provide your answer below: FEEDBACK MORE INSTRUCTION SUBMIT Content attribution Next . * Previous stYUGOLIVIIT / & PL Consider the imperfect competition market structures of monopolistic competition and oligopoly. In which market structure(s) will we likely see firms taking advantage of large economies of scale? O Monopolistic competition O Oligopoly O Both of the above O None of the above Question 50 2 pts Consider the imperfect competition market structures of monopolistic competition and oligopoly. In which market structure(s) will we see firms trying to maximize their profits? O Monopolistic competition Oligopoly O Both of the above O None of the abovee. daily compounding? 365 $5,256.34 5.13% 24 27 2. Rework problem #1 assuming a 5-year CD with $5000 principal No of compounding in a year Future Value EFF 5 years CD a. annual compounding? 1 56,381.41 5.00% Principal 5000 Year 5 b. semi-annual compound 2 $6,400.42 5.06% Rate 5% c. quarterly compounding? 4 $6,410.19 5.09% d. monthly compounding? 12 $6,416.79 5.12% e. daily compounding? 365 $6 420.02 5.13% 3. Assume you want to invest $1000 at the END of every year for the next 5 years. HINT Future Value a. What is the future value in year 5, if interest is compounded annually? b. What is the future value in year 5 if interest is compounded semiannually? MUST use EFF for your interest rate 4. Rework question 3, assuming payments are made at the BEGINNING of each pericHINT Future Value a. What is the future value in year 5, if interest is compounded annually? b. What is the future value in year 5 if interest is compounded semiannually? MUST use EFF for your interest rateThe trade balance is million dollars. Part 2 (1 point) The balance on the current account is million dollars. Part 3 (1 point) The balance on the capital account is million dollars