New answers tagged finance
1
First, you are right that monthly return data is used. Table 1 concludes, that a one unit increase of gross profitability accounts for an additional 0.75% stock return per month after controlling for book-to-market ratio, size, stock reversal ($r_{1,0}$) and momentum ($r_{12,2}$).
Table A2 is based on the following statement on p.17:
Table A2 shows ...
0
The MACRS depreciation is specified in US tax legislation. You look up the percentages in tables printed by the Internal Revenue Service, just like you look up your tax brackets, etc. Finance textbooks often have an appendix where these tables are reproduced for your convenience.
An example:
http://milefoot.com/math/businessmath/topics/macrsDep.jpg
2
Already answered, but...
from scipy.optimize import root
def pv(r): return 2000 / (1+r)**2 + 3000 / (1+r)**4
rate = root(lambda x: pv(x) - 4000, 0.)['x'][0]
print(f"Rate is {rate*100:.5f}%")
print(f"Present Value is {pv(rate):,.2f}")
Rate is 7.30274%
Present Value is 4,000.00
2
try this :
4000= 2000/(1+r)^2 + 3000/(1+r)^4 solving this equation for r you'll find equals 7.30274083178438%.
2
Annual Accounting Profit = Revenues -costs - depreciation
Revenues =13000
Costs= 10000
Annual depreciation = 30000/10yrs = 3000
Therefore annual accounting profit =0
If you believe that the property market value will indeed depreciate like this, it doesn’t seem like a good investment.
0
In Black Scholes formula you would use implied volatility surface for given time-to maturity and strike for first option and second option respectively (check if you have this data on bloomberg or reuters)
If you don't have options available on the market for this company , then the approximation would be to use realized volatility (average, or ...
2
To hedge your long call option (which as a delta between 0 and 1), you had to short sell some stock. If the stock price crashes the option you are long of is less in the money (or further out of the money). Therefore you are overhedged by your short stock position and need to buy back some stock.
You can also think in terms of gamma. Your long vanilla ...
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