Suppose you have purchased a Costco stock, which type of option should be chosen for hedging? Based on the option you selected, choose the appropriate strike price to calculate the option price,

Pls show Every step and concept

Please show step by step work (not in excel): What is the call option premium given the following information? What would happen to the call price if the company initiated and paid a dividend before the expiration of the option? What would happen to the call premium if the expiration of the option expanded beyond the current 9 months? Stock price   $36.00 Strike price $30.00 Volatility 16% Dividend Yield 0.00 Time 0.75 Riskfree Rate 2.70%

3 You are given the following information on some company's stock, as well as the risk- free asset. Use it to calculate the price of the call option written on that stock, as well as the price of the put option. (HINT: You should use the Black-Scholes formula!) (Do not round intermediate calculations and round your final answers to 2 decimal places, e.g., 32.16.) Today's stock - $77 price = Exercise price = $75 Risk-free rate = Option maturity = 5 months Standard deviation of annual stock returns Call price Put price $ $ 3.4% per year, compounded continuously = 59% per year 3.61 x 0.56 X 1

The returns on small company stocks are 10.7%, U.S. Treasury bill offer a 1.5% return and a bank savings account offers an 1.3% return. What is the risk premium on small company stocks?

Use the Black-Scholes formula to find the value of a call option based on the following inputs. (Round your final answer to 2 decimal places. Do not round intermediate calculations.) Stock price Exercise price Interest rate Dividend yield Time to expiration Standard deviation of stock's returns Call value GA $ $ $ 48 60 0.07 0.04 0.50 0.26

Ningbo Industrial Concepts Incorporated             Initial stock price $115.00             Exercise price $115.00             Call price $4.75             Put Price $4.50                             Required:               Using the information in the table above, please calculate dollar value of the following option strategies. Use this calculated dollar value to determine the profit of each strategy at various stock prices.                 (Use cells A3 to B6 from the given information to complete this question. Negative answer should be input and displayed as a negative value. All other answers should be input and displayed as positive values.)                   Ningbo Industrial Concepts Incorporated Dollar Value of Strategy as a Function of Current Stock Price     Strategy $95.00 $105.00 $115.00 $125.00 $135.00     Straddle               Strip               Strap                               Ningbo Industrial Concepts Incorporated Rate of Return…

Use the Black-Scholes formula to find the value of a call option based on the following inputs. Note: Do not round intermediate calculations. Round your final answer to 2 decimal places. Stock price Exercise price Interest rate Dividend yield Time to expiration Standard deviation of stock's returns Call value $ 54 $ 63 0.082 0.04 0.50 0.260

Assume that if M launches a new e-trading platform, its price will go up to $261. Else, M price will go down to $62. You are aware that M shares are being traded at $162. You also know that the risk-free rate is 5%.What is the probability that M price will go down?***Please round your answer to the nearest three decimals (i.e. 0.512)

A stock is currently trading for $25 per share and an investor is interested in the following two options with a one year expiration term. Options Call Put Strike Price $28 $24 Quoted Price $2 $4 a) Calculate the intrinsic values of the call and put. b) Draw the profit diagram for a short position in the put option described above. Label the diagram well. Show all the critical points on the diagram. For example, the intercepts on axes, maximum profit or maximum loss. What price movements are required for the investor to have a positive profit? c) Draw the profit diagram for a long position in the call option. And label the diagram well. d) Suppose one month later, the stock price moves up to $30 per share, how will the prices of the call and put change? Why? Briefly explain. e) Suppose an investor purchased 10 contracts of the 28 calls and sold 10 contracts of the 24 puts. If the stock price turns out to be $30 per share in one month, what is the total profit for this investor?