Question
In: Finance
A call option on Jupiter Motors stock with an exercise price of $80.00 and one-year expiration...
A call option on Jupiter Motors stock with an exercise price of $80.00 and one-year expiration is selling at $7.48. A put option on Jupiter stock with an exercise price of $80.00 and one-year expiration is selling at $9.12. If the risk-free rate is 3% and Jupiter pays no dividends, what should the stock price be? (Do not round intermediate calculations. Round your answer to 2 decimal places.; Use CONTINUOUS COMPOUNDING)
Stock price $
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You are attempting to value a call option with an exercise price of $140 and one year to expiration. The underlying stock pays no dividends, its current price is $140, and you believe it has a 50% chance of increasing to $160 and a 50% chance of decreasing to $120. The risk-free rate of interest is 10%. Based upon your assumptions, calculate your estimate of the the call option's value using the two-state stock price model. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Value of the call $
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make sure the answers for these questions are correct please please
Solutions
jeff jeffy answered 7 months agoRelated Solutions
Consider a call option with an exercise price of $110 and one year to expiration. The...
Consider a call option with an exercise price of $110 and one
year to expiration. The underlying stock pays no dividends, its
current price is $110, and you believe it has a 50% chance of
increasing to $120 and a 50% chance of decreasing to $100. The
risk-free rate of interest is 10%
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A call option with an exercise price of $110 has six months to
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ending prices: $150 or $105. The risk-free rate of return is 8
percent per annum. Calculate the price of this call option using
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methods of your preference)
A call option with an exercise price of $110 has six months to the expiration date....
A call option with an exercise price of $110 has six months to
the expiration date.
Currently, the stock is sold at a price of $120. At the expiration
date, the underlying stock has
two possible ending prices: $150 or $105. The risk-free rate of
return is 8 percent per annum.
Calculate the price of this call option using binomial option
pricing model.
Suppose you write a May expiration call option on Delta Airlines with exercise price $50 and...
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is $0.91 and the premium of the put option is $0.54. Assume Delta
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What is the call price according to the black-Scholes
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