Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. consider an "exotic derivative" contract on the s&

Consider an "exotic derivative" contract on the S&P500 index. Today, the index is 4200, and...

50.1K

Verified Solution

Question

Finance

Consider an "exotic derivative" contract on the S&P500 index. Today, the index is 4200, and the derivative contract will pay its holder $12 when the S&P500 doubles for the first time. Under the no-arbitrage condition, what should the price of this contract be today?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

• Describe the below Terms: 1. FTP 2. SMTP 3. DNS

Programming
Q

In the figure, the particles have charges q1 = -q2 = 390 nC and q3 =...

Physics
Q

Find the domain of the function f(x) =(x^2 +2x +1)/x+1a)Set of negative real numbersb)Set of...

Basic Math
Q

Assume that the sample is a simple random sample obtained from a normally distributed population...

Statistics
Q

x 2 x 1 1 4x x 2x 3 3x 0 8 x x 1...

Algebra
Q

Solve the equation I log 1 3 log 1 7x 12

Algebra
Q

A line through the origin and 10 4 is shown in the standard x y...

Algebra
Q

Sales, Production, Direct Materials Purchases, and Direct Labor Cost The budget director of...

Accounting
Q

E10-6 Rottino Company purchased a new machine on October 1, 2017, at a cost of...

Accounting
Q

Lander Company has an opportunity to pursue a capital budgeting project with a five-year time...

Accounting
Q

monef of purchase and 75% the following month. Calculate the budgeted paymonts for the rionth...

Accounting
Q

CASE Background: Sparkling Clean Services (SCS) is a local business in the Tri-cities area. It...

Accounting