# Tagged Questions

Questions having to do with financial mathematics. Please note that for questions in quantitative finance, quant.stackexchange.com is perhaps a better site.

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### Mathematics Finance Percentages

A man wanted to invest an amount for a week and wanted maximum returns on this investment.There are three alternatives as given below: Alternative 1: Invest in mutual funds of X Ltd. If rise occurs ...
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### Expected annual returns (financial maths)

An economy contains these three assets: Asset A has standard deviation of returns (per annum) of 25% and market capitalisation $600m Asset B has standard deviation of 20%, market capitalisation$...
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### Math Finance Question NPV?!

A foundation announces that it will be offering one MIT scholarship every year for an indefinite number of years. The first scholarship is to be offered exactly one year from now (today is year $0$, ...
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### Relations between Call and Put

I am trying to solve a question in finance but I am pretty much stuck and would need your help :) Suppose you know the following information about a market: Future is at 66 70 strike straddle is ...
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### Calculating accumulated values for annuities

Having difficulty with this problem Find the accumulated value at end of four years of an investment fund in which 100 is deposited at the beginning of each quarter for the first two years and ...
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### Determining outstanding balance using the prospective method

A loan is being repaid with 10 payments of 2,000 each followed by 10 payments of 1,000 each at the end of each half-year. Assume that the nominal rate of interest convertible semiannually equals ...
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### Calculating ROI of Feature

I have the following figures: (x) Quote for new software feature: $10,000 (y) Employee Rate:$15.00/hour (z) Hours per Day to perform task manually: 2 (n) Number of working days in a year: 251 (a)...
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### Financial mathematics annuities problem

I'm having trouble understanding the solution of this problem. Find the present value of a ten-year annuity which pays 400 at the beginning of each quarter for the first 5 years, increasing to 600 ...
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### A sum of money amounts to Rs.49400 in 3 years and Rs.50400 in 5 years > at the same rate of simple interest.

A sum of money amounts to Rs.49400 in 3 years and Rs.50400 in 5 years at the same rate of simple interest. Find rate of interest per annum. This question was asked in Railway Exam. Source: ...
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### What is a hedge ratio tree?

Determine the stock price tree, the call option tree, and the hedge ratio tree. I have to make three separate trees for a european call option, I know what a stock price tree and a call option tree ...
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### Is the price of a European option at time $1$ equal to the payoff at time $1$ if expiration is time $2$?

$S(0)=150, u=1.2, d=.8, X(\text{strike price})=120, r=10\%$, expiration $T=2$ where $S(t)$ is price of stock at time $t$, $S_u$ is price of stock if it goes up at time $1$ and $S_{uu}$ is price of ...
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### Showing that the square of Brownian motion, minus time, is a martingale

What exactly are we supposed to do to show what they have given is a martingale. If I try to follow through I'm getting a bit confused. In the third to last line I don't understand how they have ...
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### How are Eurodollar futures prices calculated?

Whether the lecture notes are poorly written, or whether I'm just failing to understand them, I do not know. I'm currently looking at the following section, on Eurodollar futures: As you can see, ...
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### Using reflection principle to find probabilities

I'm not able to answer these questions because firstly I don't understand the reflection principle properly. Secondly if someone could provide a visual explanation as to how this process works then ...
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### Interest rate calculation of non-constant monthly installments

I would like to calculate the interest rate $i$ of an annuity with $n$ payment periods. I have found a lot on this topic if the annuities $FV_t$ are constant (geometric series). In my case the ...