Question
In: Finance
What is the price of a European put for Stock at 50, strike at 50, Risk-Free...
What is the price of a European put for Stock at 50, strike at 50, Risk-Free 10%, Volatility at .85 Time at .4167 Pick the closest value?
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A. 12.34 |
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B. 24.39 |
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C. 10.10 |
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D. 8.94 |
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Question 3. A 1-year European put option on a stock with strike price of $50 is...
Question 3. A 1-year European put option on a stock with strike
price of $50 is quoted as $7; a 1-year European call option on the
same stock with strike price $30 is quoted as $5. Suppose you long
one put and short one call (one option is on 100 share).
a) Draw the payoff diagram for your put position and call
position.
b) After 1-year, stock price turns out to be $45. What is your
total payoff? What is...
Consider a European put option on a share of a company. The strike price is 50....
Consider a European put option on a share of a company. The
strike price is 50. The investors pays an option premium of 10. If
the payoff for the investor (not taking into account the option
premium) is 10, then what is the profit of the option writer
(taking everything into account)?
Please leave answer to 4 decimal places
Consider a European put option on a share of a company. The strike price is 50....
Consider a European put option on a share of a company. The
strike price is 50. The investors pays an option premium of 10. If
the payoff for the investor (not taking into account the option
premium) is 10, then what is the profit of the option writer
(taking everything into account)?
1.The price of a three-month European put option on a stock with a strike price of...
1.The price of a three-month European put option on a stock with
a strike price of $60 is $5. There is a $1.0067 dividend expected
in one month. The current stock price is $58 and the continuously
compounded risk-free rate (all maturities) is 8%. What is the price
of a three-month European call option on the same stock with a
strike price of $60?
Select one:
a. $5.19
b. $1.81
c. $2.79
d. $3.19
2.For the above question, if the...
A European call option and put option on a stock both have a strike price of...
A European call option and put option on a stock both have a
strike price of $21 and an expiration date in 4 months. The call
sells for $2 and the put sells for $1.5. The risk-free rate is 10%
per annum for all maturities, and the current stock price is $20.
The next dividend is expected in 6 months with the value of $1 per
share.
(a) describe the meaning of “put-call parity”. [2
marks]
(b) Check whether the...
A European call option and put option on a stock both have a strike price of...
A European call option and put option on a stock both have a
strike price of $21 and an expiration date in 4 months. The call
sells for $2 and the put sells for $1.5. The risk-free rate is 10%
per annum for all maturities, and the current stock price is $20.
The next dividend is expected in 6 months with the value of $1 per
share.
(a) In your own words, describe the
meaning of “put-call parity”.
(b) Check...
A European call option and put option on a stock both have a strike price of...
A European call option and put option on a stock both have a
strike price of $25 and an expiration date in four months. Both
sell for $4. The risk-free interest rate is 6% per annum, the
current stock price is $23, and a $1 dividend is expected in one
month. Identify the arbitrage opportunity open to a
trader.
Calculate the European put price using the BSMOPM. The current stock price is 50 and the...
Calculate the European put price using the BSMOPM. The current
stock price is 50 and the exercise price is 55. The continuously
compounded risk-free rate is 5%. The option expires in 25 days and
volatility is 75%.
Round to 4 decimals – You must solve this by hand
clearly show the answer for each part
A European put will expire in two months on a non-dividend paying stock. The strike price...
A European put will expire in two months on a non-dividend
paying stock. The strike price for the put is $25 and the price of
the put option is currently $2.00. The current value of the stock
underlying the put option is $18 and the risk-free rate (based on
continuous compounding) is 4%. Using this information explain how
an investor can take advantage of any arbitrage opportunity,
assuming one exists. If arbitrage is possible, calculate the
present value of any...
The price of a European put that expires in six months and has a strike price...
The price of a European put that expires in six months and has a
strike price of $100 is $3.59. The underlying stock price is $102,
and a dividend of $1.50 is expected in four months. The term
structure is flat, with all risk-free interest rates being 8%
(cont. comp.).
What is the price of a European call option on the same stock
that expires in six months and has a strike price of $100?
[1 marks]
Explain in detail...
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