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question reltd to p4
In bpp Question # 25 Blipton International how he clculated nominal cash flows of rturn phase before tax plus what’s the reason for aplying different Black-Scholes model in q29 n q 30 of it I mean he caculated d1 with diferent formula in these 2q kindly tell me the reason for this plus is this possible that I cn find that with Same formula in both q’s i-e one given in exam.
Hi,
Q25 – nominal cash flows are calculated: real cashflows * inflation.
Q29 and Q30 – the formula is exactly the same, only there are different letters used and different view.
look at the below mathematics:
Q29 formula = (ln(P/X)+ rT) / ??T + 0.5??T = (ln(P/X)+ rT) / ??T + 0.5??T*??T / ??T = (ln(P/X)+ rT) / ??T + 0.5?*?T / ??T = (ln(P/X)+ rT + 0.5?*?T) / ??T = (ln(P/X) + (r + 0.5?*?)T) / ??T = Q30 formulaI hope this helps.
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could anyone dend to me the mock exams of p4? Thanks a lot
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