Math Question 6: Suppose that USD/sterling spot rate is 1.55…

Math Question 6: Suppose that USD/sterling spot rate is 1.558, the 90-day forward rate is 1.5556, and the 180-day forward rate is 1.5518. Identify the arbitrage opportunities in the following situations:(a) A 180-day European call option to buy £1 for $1.52 costs 2 cents. (b) A 90-day European put option to sell £1 for $1.59 costs 2 cents. Ignore the time value of money in your computations. Clearly state the strategy for each part and calculate the arbitrage profit. Once completed, select “True” below.

Math Question 1: ABC holdings plans to pay a $1.10 dividend…

Math Question 1: ABC holdings plans to pay a $1.10 dividend per share in 3 months and a $1.15 dividend in 6 months. ABC’s share price today is $45.60 and the continuously compounded interest rate is 8.4%. What is the forward price (in dollars) for the delivery of ABC stock immediately after the second dividend? 

This test contains the exam questions as well as instruction…

This test contains the exam questions as well as instructions to follow and submit your written work.You have 60 minutes to complete the math questions + an additional 15 minutes for set up, scanning and submission. You can use an on-screen calculator (from Step 1) or a handheld calculator for this exam. No phone calculators allwoed.Please note that only pre-approved self created one page (front and back) formula sheets will be allowed.Please leave this test open until you have completed your online exam and successfully submitted your written work.

The next TEN questions are the math questions for the exam….

The next TEN questions are the math questions for the exam. Question #10 is an optional bonus problem. Make sure to write down supporting written work for ALL problems. All questions are graded out of 5 points.  If you get the multiple choice or numeric answer wrong, you can still earn up to 4.5 pts for your supporting written work.DO NOT SUBMIT OR CLOSE YOUR TEST before answering all the questions.