Question
The promised cash flows of three securities are listed below. If the cash flows are risk-free, and the risk-free interest rate is 3.5 %3.5%, determine
The promised cash flows of three securities are listed below. If the cash flows are risk-free, and the risk-free interest rate is 3.5 %3.5%, determine the no-arbitrage price of each security before the first cash flow is paid.
| Security | Cash Flow Today ($) | Cash Flow in One Year ($) | |||
| A | 600 | 600 | |||
| B | 0 | 1200 | |||
| C | 1200 | 0 |
The no-arbitrage price of security A is $ (Round to the nearest cent.)
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Technical Analysis Of Stock Trends
Authors: Robert D. Edwards, John Magee, W.H.C. Bassetti
10th Edition
1439898189, 978-1439898185
