Calculate the Maturity Value of a Five-Year, $400,000 Guaranteed Investment

question 4

Multiple Choice

Calculate the maturity value of a five-year, $400,000 Guaranteed Investment Certificate at accumulating at 6% compounded quarterly.

• A) $538,742
• B) $696,988
• C) $880,000
• D) $903,443
• E) $994,001

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Definitions:

Black-Scholes Model

A mathematical model used to price European-style options, evaluating their worth based on stock volatility, risk-free rate, and other factors.

Option Theta

A measure of the rate of decline in the value of an options contract due to the passage of time.

Underlying Asset

The financial asset upon which a derivative's value is based, such as stocks, bonds, commodities, or currencies.

Black-Scholes Model

A mathematical model used for pricing European call and put options, offering a theoretical estimate of the price of options based on time, volatility, and other factors.