Finance

Practice problems for Finance

• Bid-Ask Spread as a Percentage of Mid
• Pricing a Simple Coupon Bond
• Time Value of Money: Monthly Compounding
• Delta of a European Call in Black–Scholes
• Gamma of a European Call in Black–Scholes
• Minimum-Variance Futures Hedge
• Height of $1 Million in $100 Bills
• Implied Volatility from an ATM Call Price
• Macaulay Duration of a 2-Year Coupon Bond
• No-Arbitrage Forward Price
• Parametric 95% One-Day VaR (Normal Returns)
• Risk-Neutral Drift for a Non-Dividend Stock
• Theta via a One-Day Finite Difference
• Vega: Price Change from an Implied Volatility Move
• Barrier Option Identity: Up-and-Out vs Vanilla
• Black–Scholes Gamma Formula
• Black–Scholes PDE Form
• Bond Price Sensitivity Using Duration and Convexity
• Call Option Payoff at Expiration
• Call Option vs Stock: Key Advantage
• Compound Interest Calculation
• Effect of Volatility on Option Moneyness Probability
• Expected Value of Dice Rolls
• Put-Call Parity: Solve for the Put Price
• Two-Asset Portfolio VaR with Correlation
• Volatility and Call Option Prices
• Boy or Girl Paradox: Two Children Probability
• Key Difference Between Option and Futures Pricing Inputs
• Two Children Problem with Named Child (Tom)
• Winner's Curse Bidding Problem