1. Calculate the value of a three month at the money European call option on a stock index when the index is at 250, the risk free rate is 10% per annum, the volatilitity of the index is 18% per annum, and the dividend yield on the index is 3% per annum.
2. A stock just paid a dividend of $2 per share, has an expected growth rate of 5% and a required rate of return of 15%. What should be the price of the stock?
3. Locate the data on the Conference Board Business Cycle Indicators, and find out what is the latest reading (September, released in October) of the Leading Economic Indicators index for the U.S.
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