by Dan | Feb 22, 2023 | finance
Define a function called european_put() that prices a put option. 1. Test that it is able to price a put option correctly. With the following parameters, the price of the put should be 3.44… Here are the inputs: european_put(S0=15,...
by Dan | Feb 22, 2023 | finance
Download stock return data from CRSP and select monthly frequency. Each group should use different data period; I will inform you about it with the group formation. When selecting the Value-Weighted index, use the one that includes distributions. Also,...
by Dan | Feb 22, 2023 | finance
work with the Survey of Professional Forecasters (SPF) from the Philadelphia Federal Reserve. Background information about the survey can be found at this link:...
by Dan | Feb 22, 2023 | finance
We know from finance that a coupon bond can be priced as follows: 𝑃𝑟𝑖𝑐𝑒=𝑃(𝑐𝑜𝑢𝑝𝑜𝑛𝑠)+𝑃𝑉(𝑓𝑎𝑐𝑒 𝑣𝑎𝑙𝑢𝑒) , where the discount rate is known as the yield to maturity (YTM). It is a known problem in finance that we cannot use a closed form solution to solve for the YTM...
by Dan | Feb 14, 2023 | finance
A company is considering two mutually exclusive expansion plans. Plan A requires a $39 million expenditure on a large-scale integrated plant that would provide expected cash flows of $6.23 million per year for 20 years. Plan B requires a $11 million expenditure to...
by Dan | Feb 14, 2023 | finance
Why do capital expenditures increase assets (PP&E), while other cash outflows, like paying salary, taxes, etc., do not create any asset, and instead instantly create an expense on the income statement that reduces equity via retained earnings?...
