Use the Data Given Below to Answer the Following Questions)

question 10

Multiple Choice

Use the data given below to answer the following questions) .
On an average, the number of students that choose to study Arts subjects at Greyin Tide University is 17 each year. Hint: Use Poisson distribution formula) .
-The exponential distribution:

• A) has the density function f x) = e-λx , for x ≥ 0.
• B) models the time between randomly occurring events.
• C) has an expected value λ.
• D) is described by the familiar bell-shaped curve.

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Definitions:

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Straight Bond Value

The value of a bond that pays a fixed interest rate (coupon rate) and does not have any embedded options such as convertibility or callability.

Convertible Bond

A bond that offers the option to be exchanged for a specific quantity of the issuing company's stock at chosen intervals throughout its tenure, generally at the choice of the person holding the bond.

Call Option

A financial contract giving the buyer the right, but not the obligation, to buy an asset at a specified price within a certain period.