43. ABC Company's current stock price is $100. The risk free rate is 4%. The minimum value of an America call option with an exercise price of $80 and 6 months till expiration is closest to a. $20 b.$100 c.$21.55
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- ABC Company's current stock price is $100. The risk-free rate is 4%. 38. The payoff to the holder of a call option on ABC with an exercise price of $200 is closest to: A. $100 if stock price at option expiration equals $200 B. Zero if stock price at option expiration equals $100 C. -S40 if stock price at option expiration equals $16041. ABC Company's current stock price is $100. The risk free rate is 4%. The maximum value of a European put option with an exercise price of $50 and 6 months remaining till expiration is closest to a. $49.03 b. $50 c.$21.559. The stock price of ABC Corporation is currently $220. Over the next year, the stock price will increase by 15% or decrease by 10%. The interest rate at-which investors invest in riskless assets is 4%. Using the binomial option pricing model, the value of a call option with an exercise price of $230 and an expiration date 1 year from now should be worth today. A. $10.56 B. $9.61 C. $11.03 D. $12.38
- 39. ABC Company's current stock price is $100. The risk free rate is 4%.The payoff to the holder of a put option on ABC with an exercise price of $200 is closest to a.$100 if stock price at option expiration equals $200 b.zero if stock price at option expiration equals $100 c.$40 if stock price at option expiration equals $160The stock price of Facebook is $28 and the strike price of a put option with 4 month maturity on a non-dividend-paying stock is $25. The risk-free interest rate is 8% per annum. With this information, the upper bound for the price of the call option with same strike price and expiration date is O I. Cts 25 O II. t s 28 O III. ct s 20.3074 O IV. None of the above.13. Assume Company AAA options have an exercise price of $45 and expire in 156 days. The current price of Company AAA stock is $44.375. The (annually compounded) risk-free rate is 7 percent per year and the standard deviation of Company AAA's stock returns is 0.31. Calculate d1 [Use the Black-Scholes formula].
- 3. Consider a European put option on a non-dividend paying stock with exercise price 100 USD and expiration in one month. Interest rate is 1 percent and volatility of the stock is 0.4. Stock price 90 USD. Option price?? Use excel.1. The risk free rate is5%. You own one share of a stock that does not pay dividends with current price of$110. A call option with 6 months maturity and strike of$100trades at a premium of$11. What should you do and why?3. Consider a European call option on a non-dividend paying stock with exercise price 100 USD and expiration in one month. Interest rate is 1 percent and volatility of the stock is 0.4. Stock price 90 USD. Option price?? Use excel.
- Assume a stock price is P120, and in next year, it will either rise by 10 percent or fall by 20 percent. The risk-free interest rate is 6%. A call option on this stock has an exercise price of P130. What is the chance that the stock price will rise? a. 93% b. 87% c. 50% d. 94%1. Assume you buy a March RM1625 FBM-KLCI call option for RM25 and hold until expiry. What will be your maximum loss in ringgit? 2. Suppose you bought stock XYZ December RM8 put options for 40 sen. What is the premium?1. The current price of a non-dividend paying stock is $30. Use a two-step tree to value a European put option on the stock with a strike price of $32 that expires in 6 months with u = 1.1 and d = 0.9. Each step is 3 months, the risk free rate is 8%. Group of answer choices $2.24 $2.64 $2.84 $2.44