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Rebecca is interested in purchasing a European call on a hot new stock, Up, Inc. The...
Rebecca is interested in purchasing a European call on a hot new stock, Up, Inc. The call has a strike price of $ 99.00 and expires in 94 days. The current price of Up stock is $ 116.59, and the stock has a standard deviation of 39 % per year. The risk-free interest rate is 6.39 % per year. Up stock pays no dividends. Use a 365-day year.
a. Using the Black-Scholes formula, compute the price of the call. b. Use put-call parity to compute the price of the put with the same strike and expiration date. (Note: Make sure to round all intermediate calculations to at least five decimal places.)
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jeff jeffy answered 2 months agoRelated Solutions
Rebecca is interested in purchasing a European call on a hot new stock, Up, Inc. The...
Rebecca is interested in purchasing a European call on a hot
new stock, Up, Inc. The call has a strike price of $ 97.00 $97.00
and expires in 93 93 days. The current price of Up stock is $
119.82 $119.82, and the stock has a standard deviation of 43 % 43%
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Rebecca is interested in purchasing a European call on a hot new stock, Up, Inc. The...
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a. Using the Black-Scholes formula, compute the price of the
call.
b....
Rebecca is interested in purchasing a European call on a hot new stock, Up, Inc. The...
Rebecca is interested in purchasing a European call on a hot
new stock, Up, Inc. The call has a strike price of
$ 95.00
and expires in
89
days. The current price of Up stock is
$ 118.73
and the stock has a standard deviation of 45%
per year. The risk-free interest rate is 6.94%
per year. Up stock pays no dividends. Use a 365-day year.
a. Using the Black-Scholes formula, compute
the price of the call.
b. Use put-call...
Rebecca is interested in purchasing a European call on a hot new stock, Up, Inc. The...
Rebecca is interested in purchasing a European call on a hot
new stock, Up, Inc. The call has a strike price of $ 99.00 and
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dividend of $1 will be paid after 3 months and again after 6
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Assume the following information for a stock and a European call option written on the stock...
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option written on the stock ,Exersice price 80,current stock price
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rate of return 0.07.Detaermin the time premium using Binomial
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using BSM model. work the problem out do not use excel
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The
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