Based on Exhibit 3, if DeLille Enterprises pays the dividend expected by Gillette, the conversion price of the DE bond will: be adjusted downward. not be adjusted. be adjusted upward. Can anyone please explain logic ?
SSEI QForum Latest Questions
>1) If cashflows are not path dependent then we can use binomial tree and Monte carlo simulation and if cashflows are path dependent then we can use only monte carlo simulation is this correct ? >2) and suppose options are ...
Why my binomial interest rate tree is not matching?
Zhong asks, “Are there other ways to calculate the arbitrage-free value of a bond?” Goll responds, “Yes, the arbitrage-free value of a bond can also be calculated using a binomial interest rate tree, such as the one in Exhibit 3 ...
Can anyone tell me why condition 1 is wrong? Maalouf explains, “Valuation using a binomial interest rate tree is based on the principle of no arbitrage. In order for there to be no arbitrage in a financial market, three conditions must ...
Bootstrapping entails forward substitution, however, using par yields to solve for zero-coupon rates one by one, in order from earliest to latest maturities Can someone explain the meaning of earliest to latest maturities
Module 6: “Consider a portfolio of zero-coupon bonds that mature at different times in the future. Changes in interest rates are not always parallel across maturities, so let’s analyze what happens as rates change across the yield curve. Let’s ...