The current stock price of Johnson & Johnson (J&J) is $56, and the stock does not pay dividends. The instantaneous risk-free rate of return is 6%. The instantaneous standard deviation of J&J's stock is 25 %. You want to purchase a put option on this stock with an exercise price of $50 and an expiration date 70 days from now. Assume 365 days in a year Using Black - Scholes, the put option should be worth today. Multiple Choice $0.36 $6.94 $6.58 $0.29
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- The current stock price of Johnson & Johnson (J&J) is $54, and the stock does not pay dividends. The instantaneous risk-free rate of return is 5%. The instantaneous standard deviation of J&J's stock is 40%. You want to purchase a put option on this stock with an exercise price of $45 and an expiration date 65 days from now. Assume 365 days in a year Using Black-Scholes, the put option should be worth. Multiple Choice $0.53 $0.46 $9.57 $9.93 today.Suppose XYZ stock pays no dividends and has a current price of $50. The forward price for delivery in 1 year is $55. Suppose the 1-year eective annual interest rate is 10%. (a) Graph the payo and prot diagrams for a forward contract on XYZ stock with a forward price of $55. (b) Is there any advantage to investing in the stock or the forward contract? Why? (c) Suppose XYZ paid a dividend of $2 per year and everything else stayed the same. Now is there any advantage to investing in the stock or the forward contract? Why?Shopify, Inc common stock currently sells for $1,229.91 per share, and the standard deviation of returns is 58.67%. A call option with a strike price of $1,100 is currently trading on the market. The option expires in 0.15 years, and the risk-free rate of return is 0.9%. Shopify does not pay a dividend. What is rho (ρ) for this call option assuming a continuous model such as the Black-Scholes model? A) 104.1327 B) 107.2895 C) 57.7772 D) 107.0002
- The current stock price of Alcoco is $60, and the stock does not pay dividends. The instantaneous risk-free rate of return is 6%. The instantaneous standard deviation of Alcoco's stock is 40%. You want to purchase a call option on this stock with an exercise price of $65 and an expiration date 30 days from now. Based on the Black-Scholes OPM, the call option's delta will be A. B. 0.32 0.25 0.60 0.28Suppose a zero dividend payment stock is selling for K48 per share.The standard deviation of the return on this stock is 25%.The risk free rate is 8%.The option has a strike price of K50.For a 6 month call option on this stock,find; D1 and D2 N(d1) and N(d2) Value of the call option and Value of the put optionConsider the following information on AAPL. The current stock price is $326.72. The call option has a strike price of $320. The price of the call option is $68. The option has 1 year till expiration. Question: Suppose you purchase the option at the current price and hold it until expiration. If the stock price at expiration is $350, the return on your investment is: -55.88% 44.11% -100% None of the above
- If a particular stock does not pay dividends and is currently priced at $24 per share, what should be the price of a call option with a maturity of one year and a strike price of $24.5 if put options with the same features currently cost $2? Assume a risk-free rate of 2%. (use 5 decimal places)The current price of a stock is $33, and the annual risk-free rate is 4%. A call option with a strike price of $32 and with 1 year until expiration has a current value of $6.52. What is the value of a put option written on the stock with the same exercise price and expiration date as the call option? Do not round intermediate calculations. Round your answer to the nearest cent.The current price of a non-dividend-paying stock is $30. Over the next six months it is expected to rise to $36 or fall to $26. Assume the risk-free rate is zero. What is the initial value of the call option? Choose the right answer: a. $2 b. $3 c. $1.6 d. $2.4
- Shopify, Inc common stock currently sells for $1,185.31 per share, and the standard deviation of returns is 68.35%. A put option with a strike price of $1,100 is currently trading on the market. The option expires in 0.15 years, and the risk-free rate of return is 4.3%. Shopify does not pay a dividend. What is rho (p) for this put option assuming a continuous model such as the Black-Scholes model? O 94.5148 O 93.8567 O 93.3034 O 70.6357Compute the Black-Scholes price of a put option on a stock which does not pay dividends and has the volatility 0.2, if its exercise price is 200 USD and expiration in one year. Interest rate is zero and the price of the stock is 180 USD. use excel.Compute the Black-Scholes price of a put option on a stock which does not pay dividends and has the volatility 0.2, if its exercise price is 200 USD and expiration in one year. Interest rate is zero and the price of the stock is 180 USD. Use excel and share the formula template.