1. Define and discuss Chi-square analysis and its use in cross-tabulation.
2. What is the value of a Call, given these characteristics: time to expiry = 1 month, strike price = $20, the Spot price is $23.50. The standard deviation of the annual stock returns is said to be 29%, the risk-free rate of interest would be 4.25%, and the dividend yield rate for the stock is 1.5%.
3. Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost $25 million, of which 85% has been depreciated. The used equipment can be sold today for $7.5 million, and its tax rate is 40%. What is the equipment's after-tax net salvage value? Write out your answer completely. For example, 2 million should be entered as 2,000,000.