Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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You are long both a call and a put on the same share of stock with the same exercise date. The exercise price of the call is $40 and the exercise price of the put is $45. What is the minimum payoff from this option portfolio at the expiration date? (in dollars without the dollar sign, use two decimal places).
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- Given the following information, predict the put option's new price after the stock's volatility changes. Initial put option price = $6 Initial volatility = 25% Vega = 13 New volatility = 18% (required precision 0.01 +/- 0.01) Greeks Reference Guide: Delta = ∂π/∂S Theta = ∂π/∂t Gamma = (∂2π)/(∂S2) Vega = ∂π/∂σ Rho = ∂π/∂rarrow_forwardA 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 2 decimal places.) please show in excel! thank youarrow_forwardThe current price of a stock is $34, and the annual risk - free rate is 3 %. A call option with a strike price of $32 and with 1 year until expiration has a current value of $5.54. 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. Please answer fast i give you upvote.arrow_forward
- A put option with an exercise price of $45 is currently selling for $5. The delta for the put is -0.4, and the stock is currently selling for $50. What is the elasticity of the put?arrow_forwardA stock is currently selling for $45. Over the next two periods, the stock will move up by a factor of 1.23 or down by a factor of .61 each period. A call option with a strike price of $54 is available. If the risk-free rate of interest is 3.2 percent per period, what is the value of the call option? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Value of the call optionarrow_forwardThe current price of a stock is $34, and the annual risk-free rate is 3%. A call option with a strike price of $32 and with 1 year until expiration has a current value of $6.12. 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.arrow_forward
- 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.)arrow_forwardA call option currently sells for $9.25. It has a strike price of $45 and six months to maturity. A put with the same strike and expiration date sells for $7.50. If the risk-free interest rate is 6.3 percent, what is the current stock price? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Current stock pricearrow_forwardGive typing answer with explanation and conclusion You are considering purchasing a put on a stock with a current price of $33. The exercise price is $35, and the price of the corresponding call option is $3.25. According to the put-call parity theorem, if the risk-free rate of interest is 4% and there are 90 days until expiration, the value of the put should be:arrow_forward
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