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Question:
Eric purchases a put option on Stock ABC with 6 months to expiration and a
strike price of $100.
The annual continuously compounded interest rate is 3%.
The premium for this put is $10. If the spot price of Stock ABC in 6 months is
$75, calculate the profit that Eric would make.
Answer:
Question:
A 1,000 loan is to be repaid with equal payments at the end of each
year for 20 years.
The principal portion of the 13th payment is 1.5 times the principal
portion of the 5th payment.
Calculate the total amount of interest paid on the loan.