Financing the Mozal Project
FINS 5535 Computer Assignment For this assignment, you may work in groups of up to four. The due
date for the assignment is Friday, 1 June, 2012 by 6:00pm. You may hand in the assignment at the
Banking and Finance assignment boxes on the ground floor of the Australian School of Business
building. To find the assignment boxes, go to the west elevator (further from the bookstore, closer to
the Roundhouse), and go straight out the back through the glass doors (left of the elevator). On the left
hand side you ll see the Banking and Finance assignment boxes. Let s use Assignment box 2. I ll put
up a sign closer to the due date. Or, you can hand them directly to me, or bring them to my office
during my consultation hours. Please do not disturb ... Show more content on Helpwriting.net ...
Binom(i, n, p ) ? f i ,n , i ?0 n
where i = the number of up ticks, n = total number of steps in the tree, the payoff fi,n is the same
notation used in Ch. 19, and Binom(i, n, p) is the binomial probability of having i up ticks out of n
steps when the probability of an up tick is equal to p. (In fact, Binom(i, n, p) = n! p i (1 ? p ) n ?i .) i !
(n ? i )! Note that these spreadsheets were also designed so that they could (fairly) easily be made
larger. You should be able to use Copy and Paste in order to make these trees as big as you like. Note,
however that if you do make the tree larger, you need to change the number for n (in cell L5). The
time to maturity, T, and the number of steps, n, are independent of each other. Acquaint yourself with
the option pricing spreadsheets, Puts Dvd.xls, Call Dvd.xls TrinCall.xls and TrinPut.xls. At the top of
each spreadsheet you ll find all the input variables: r = rate = risk free rate per annum (continuous
compounding), q = dividend yield per annum (also with continuous compounding), S = current stock
price, X = exercise price, ? = sigma = volatility per annum, as well as the Settlement Date (normally
the date on which the option was traded), the Option Expiry Date, and for the two spreadsheets Puts
Dvd.xls and Call Dvd.xls we also have Next Dividend Payment Date, the Dividend Payment, and the
Number of Dividends per year. The spreadsheet automatically calculates T = time to expiration (in
years, assuming 365 days
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