The price of a stock is currently $37.         Over the next half year, the price is anticipated to rise to $42 or decline to $36. The upside has a 60% probability of occurring. The risk-free interest rate is 5% p.a.. What is the price of a six month call option with an exercise price of $38?

Suppose the stock price is $20 today. In the next six months it will either fall by 50 percent or rise by 50 percent. What is the current value of a call option with an exercise price of $15 and expiration of one year? The six-month risk-free interest rate is 10 percent (periodic rate). Use the two-stage binomial method.   $7.86 $2.14 $8.23 $8.93

A stock price is currently $10. Over each of the next two three - month periods it is expected to go up by 10 percent or down by 10 percent. The risk - free interest rate is 6.184 percent per annum,the interest rate is a simple interest rate(use continuous compounding to get proper rf). The strike price is $10. Calculate the call option price and the put option price.

The current price of a stock is $22, and at the end of one year its price will be either $27 or $17. The annual risk-free rate is 6.0%, based on daily compounding. A 1-year call option on the stock, with an exercise price of $22, is available. Based on the binomial model, what is the option's value? (Hint: Use daily compounding.)

Assume a stock price is g120, and in the next year, it will either rise by 10 percent or fall by 20 percent. The risk-free interest rate is 6 percent. A call option on this stock has an exercise price of g130. What is the price of a call option that expires in one year? What is the chance that the stock price will rise?

A stock is currently priced at $47. A call option with an expiration of 1 year has an exercise price of $50. The risk-free rate is 4 percent per year, compounded continuously, and the standard deviation of the stock's return is infinitely large. What is the price of the call option? Call option price

Consider an American Put option with time to expiry of 5 months and a strike price of 82. The current price of the underlying stock is 80. Divide the time to expiry into five 1-month intervals. In each interval, the stock price can either rise by 6, or fall by 6, with unknown probability. The risk-free rate is 4.2% per annum, continuously compounded.  What is the value of the option. Please provide necessary calculations.

Suppose Carol's stock price is currently $20. In the next six months it will either fall to $10 or rise to $40. What is the current value of a six-month call option with an exercise price of $12? The six-month risk-free interest rate (periodic rate) is 5%.   $9.78   $16.88   $10.28   $13.33

A stock price is currently $30. It is known that at the end of one year, it will be either $36 and $24. The exercise price of a one-year European call option is $32. The risk-free interest rate is 5% per annum. a. Construct a binomial tree to show the payoff of the call option at the expiration date.  b. Based on the binomial tree model, what is the value of the call option?

A stock is currently selling for $39. Over the next two periods, the stock will move up by a factor of 1.29 or move down by a factor of 0.53 each period. A call option with a strick price of $50 is available. If the risk-free rate of interest is 3.2 percent per period, what is the value of the call option?