Calgarypuck Forums - The Unofficial Calgary Flames Fan Community - View Single Post - Anyone able to help with a finance question

wpgflamesfan · 02-22-2013, 09:51 PM

I'll take a shot at it:

So you're original value is 75,000
You're discount rate for 3 months would be = 1.06^(1/4) = 1.4673846%

Here are you're two binomial trees (the bottom one assumes you by the bank protection):

Since $75,760-$72,846 > $2000 (the cost of the bank protection) it would be beneficial for you to purchase the bank protection.

02-22-2013, 09:51 PM	#8
wpgflamesfan 3 Wolves Short of 2 Millionth Post Join Date: Nov 2006 Exp:	I'll take a shot at it: So you're original value is 75,000 You're discount rate for 3 months would be = 1.06^(1/4) = 1.4673846% Here are you're two binomial trees (the bottom one assumes you by the bank protection): Since $75,760-$72,846 > $2000 (the cost of the bank protection) it would be beneficial for you to purchase the bank protection. Last edited by wpgflamesfan; 02-22-2013 at 10:18 PM.