A stock is currently selling for $30. Over the next two periods, the stock will move up by a factor of 1.13 or down by a factor of 0.82 each period. A call option with a strike price of $29 is available. If the risk-free rate of Interest is 3.2 percent per period, what is the value of the call option? Note: Do not round Intermediate calculations. Round your answer to 2 decimal places. Answer is complete but not entirely correct. Value of the call option S 1.55

A stock is currently selling for $30. Over the next two periods, the stock will move up by a factor of 1.13 or down by a factor of 0.82 each period. A call option with a strike price of $29 is available. If the risk-free rate of Interest is 3.2 percent per period, what is the value of the call option? Note: Do not round Intermediate calculations. Round your answer to 2 decimal places. Answer is complete but not entirely correct. Value of the call option S 1.55

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A call option currently sells for $7.00. It has a strike price of $40 and five months to maturity. A put with the same strike and expiration date sells for $5.00. If the risk-free interest rate is 5 percent, what is the current stock price? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Current stock price
A call option is currently selling for $5.30. It has a strike price of $60 and six months to maturity. A put option with the same strike price sells for $7.80. The risk-free rate is 4.3 percent, and the stock will pay a dividend of $2.80 in three months. What is the current stock price? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.) Current stock price $
A stock is currently priced at $42 and will move up by a factor of 1.24 or down by a factor of .93 each period over each of the next two periods. The risk-free rate of interest is 3 percent. What is the value of a put option with a strike price of $51? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
A put option and a call option with an exercise price of $55 and three months to expiration sell for $1.15 and $5.30, respectively. If the risk-free rate is 4.2 percent per year, compounded continuously, what is the current stock price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current stock price
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A stock is currently priced at $35 and will move up by a factor of 1.18 or down by a factor of .85 each period over each of the next two periods. The risk-free rate of interest is 3 percent. What is the value of a put option with a strike price of $40? (Do not round intermediate calculations. Round your answer to two decimal places).
What is the value of a call option if the underlying stock price is $71, the strike price is $73, the underlying stock volatility is 35 percent, and the risk-free rate is 4.8 percent? Assume the option has 132 days to expiration. (Use 365 days in a year. Do not round intermediate calculations. Round your answer to 2 decimal places.)
A stock is currently priced at $52 and will move up by a factor of 1.14 or down by a factor of .90 each period over each of the next two periods. The risk-free rate of interest is 3 percent. What is the value of a put option with a strike price of $58? (Do not round intermediate calculations. Round your answer to 2 decimal places.) X Answer is complete but not entirely correct. Value of a put option $ 4.57
A call option is currently selling for $5.2. It has a strike price of $40 and five months to maturity. The current stock price is $42, and the risk-free rate is 5.4 percent. The stock will pay a dividend of $1.5 in two months. What is the price of a put option with the same exercise price? (Round your answer to 2 decimal places. Omit the "$" sign in your response.) Price of a put option
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