What is the value of a put option if the underlying stock price is $44, the strike price is $37, the underlying stock volatility is 49 percent, and the risk-free rate is 5.6 percent? Assume the option has 137 days to expiration. (Use 365 days in a year. Do not round intermediate calculations. Round your answer to 2 decimal places.) Value of a put option

What is the value of a put option if the underlying stock price is $44, the strike price is $37, the underlying stock volatility is 49 percent, and the risk-free rate is 5.6 percent? Assume the option has 137 days to expiration. (Use 365 days in a year. Do not round intermediate calculations. Round your answer to 2 decimal places.) Value of a put option

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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What are the prices of a call option and a put option with the following characteristics? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Stock price $88 Exercise price = $85 3.20% per year, compounded Risk-free rate = continuously Maturity 5 months Standard = 61% per year deviation Answer is not complete. Call price $ 56.84 x Put price
A stock with a current market price of $50 has an associated put option priced at $6.5. This put option has an exercise price of $48. The put option has an intrinsic value of ______ and a time value of ______. Select one: a. $0; $4.5 b. -$2; $8.5 c. $2; $4.5 d. $2; $6.5 e. $0; $6.5
a. A call option written on a stock selling for $61 per share with a $61 exercise price. The stock's standard deviation is 7% per month. The option matures in three months. The risk-free interest rate is 1.25% per month. b. A put option written on the same stock at the same time, with the same exercise price and expiration date. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. a. Call value b. Put value
Suppose you write 46 call option contracts with a $80 strike. The premium is $5.61. Evaluate your potential gains and losses at option expiration for stock prices of $70, $80, and $90. Note: Input all amounts as positive values. Do not round intermediate calculations. At stock price of $70, the At stock price of $80, the At stock price of $90, the is is
What is the value of a European put option if the underlying stock price is $36, the strike price is $29, the underlying stock volatility is 41 percent, and the risk-free rate is 4 percent? Assume the option has 150 days to expiration. (Use 365 days in a year. Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.) Value of a European put option $
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 $
You buy a share of stock, write a one-year call option with X = $26, and buy a one-year put option with X = $26. Your net outlay to establish the entire portfolio is $24.60. What is the payoff of your portfolio? What must be the risk-free interest rate? The stock pays no dividends. (Do not round intermediate calculations. Round "risk-free rate" to 2 decimal places.)
A stock sells for $125. A call option on the stock has an exercise price of $110 and expires in 3 months. If the interest rate is 0.15 and the standard deviation of the stock’s return is 0.30. What would be the price of a put option on the same stock with an exercise price of $140 and the same time (3 months) until expiration? Show all workings. (See Appendix for the Cumulative Normal Distribution Table)
A stock has a spot price of $35. Its May options are about to expire. One of its puts is worth $5 and one of its calls is worth $5. The exercise price of the put must be ___A__ and the exercise price of the call must be ___B__.
4. For a 4-month European call option on a stock you are given: (i) The stock's price is 52. (ii) The strike price is 60. (iii) The stock pays no dividends. (iv) The stock's annual volatility is 25%. (v) The continuously compounded risk-free interest rate is 5%. Determine the Black-Scholes formula for the option pricing.
In follow an Ito process with >0, a stock is worth $80 today, if the price of an option that pays the holder $2 exactly the first time the stock price reaches $200, what is the price of an option? Show all calculation.
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 1.55 x

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