3You 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 asthe price of the put option. (HINT: You should use the Black-Scholes formula!) (Do notround intermediate calculations and round your final answers to 2 decimal places,e.g., 32.16.)Today's stock - $77price=Exercise price = $75Risk-free rate =Option maturity = 5 monthsStandarddeviation ofannual stockreturnsCall pricePut price$$3.4% per year, compoundedcontinuously= 59% per year3.61 x0.56 X1

Here,The value of the call option is "C" and the value of the put option is "P".The stock price at…

You are given the following information on some company's stock, as well as the ris free asset. Use it to calculate the price of the call option written on that stock, as well a the price of the put option. (HINT: You should use the Black-Scholes formula!) (Do n round intermediate calculations and round your final answers to 2 decimal place e.g., 32.16.) Today's stock = = $77 price Exercise price = $75 Risk-free rate = Option maturity = 5 months Standard deviation of 500 3.4% per year, compounded continuously

You are given the following information on some company's stock, as well as the ris free asset. Use it to calculate the price of the call option written on that stock, as well a the price of the put option. (HINT: You should use the Black-Scholes formula!) (Do n round intermediate calculations and round your final answers to 2 decimal place e.g., 32.16.) Today's stock = = $77 price Exercise price = $75 Risk-free rate = Option maturity = 5 months Standard deviation of 500 3.4% per year, compounded continuously

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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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 = $86 price Exercise price = $85 Risk-free rate = Option maturity = 4 months Standard deviation of 5% per year, compounded continuously annual stock returns = 62% per year
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 $72 price Exercise price = $70 Risk-free rate = deviation of Option maturity = 4 months Standard annual stock returns = Call price Put price 4.3% per year, compounded continuously = 61% per year
Refer to the stock options on Microsoft in the Figure 2.10. Suppose you buy a November expiration call option on 100 shares with the excise price of $140. Required: a-1. If the stock price at option expiration is $144, will you exercise your call?a-2. What is the net profit/loss on your position? (Input the amount as a positive value.)a-3. What is the rate of return on your position? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.) b-1. Would you exercise the call if you had bought the November call with the exercise price $135?b-2. What is the net profit/loss on your position? (Input the amount as a positive value.)b-3. What is the rate of return on your position? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)c-1. What if you had bought the November put with exercise price $140 instead? Would you exercise the put at a stock price of $140?c-2. What is the rate of return on your position? (Negative…
fr1. Subject :- Accounting \ Graph the value of your portfolio as a function of the relevant stock price. Please create a graph for stock prices between 130 and 165. Assume today is the last day for exercising your options. Short a call at 163, long a put at 163, and long one share of the stock.
You ask a stockbroker what the firm’s research department expects for the three (3) stocksabove, that is, Stock X, Y and Z. The broker responds with the following information:Stock Current Price Expected Price Expected Dividend X 22 24 0.75 Y 48 51 2.00 Z 37 40 1.25Required:B. Calculate the estimated future rate of return for Stock X, Y, and Z. C. Determine which stock is overvalued, undervalued, properly valued, and state whyD. Illustrate with the use of the Security Market Line (SML) how Stock X , Y and Z wouldappear on it.
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.
Consider the following information: Stock Return if Market Return Is: Stock -128 15% A 0 21 B -13 20 -21 44 D 6 6 16 -6 What is the beta of each of the stocks? (Leave no cells blank - be certain to enter "O" wherever required. Use decimals, not percents, in your calculations. A negative value should be indicated by a minus sign. Round your answers to 1 decimal place.) Stock Beta B C D E A LLI
A stock currently trades at $100. Consider a put and a call option written on this stock with strike price $105. Which of the following statements is most accurate? A.The call option is in-the-money and the put option is out-of-the-money B.The call option is out-of-the-money and the put option is in-the-money C.Both options are in-the-money D.Cannot determine without further information
The reward-to-risk ratio for Stock X, in decimal form, is ______. Round your answer to 3 decimal places (example: if your answer is .04567, you should enter .046). Margin of error for correct responses: +/- .002. expected return (implied by market price) Beta Stock X 9.7% 0.87 S&P500 10% ? T-bonds 3% ?
The table below describes the price per share (P) and the number of shares outstanding (Q) at time = 0 and then again at time = 1. The subscripts indicate which time (t = 0 or 1) that the information applies to. Stock A Stock B Po 90 50 Qo 100 200 P₁ 95 45 Q₁ 100 200 (A) What is the "market cap" for Stock A at time 0? 9000 (B) Assume you have an index that includes only these 2 stocks. What is the value-weighted rate of return for the index from time O to time 1? Choose the answer closest to the correct number. -0.026 (C) Assume someone asked you calculate the equal-weighted return for a portfolio that included these 2 stocks. What is the equal-weighted return from time 0 to time 1? 0.055
Consider the following Information: Stock Return if Market Return Is: Stock -12% 12% 12 14 C D Stock A B -12 -32 11 20 What is the beta of each of the stocks? (Leave no cells blank - be certain to enter "0" wherever required. Use decimals, not percents, in your calculations. A negative value should be indicated by a minus sign. Round your answers to 1 decimal place.) D E 22 15 Beta
19. Investors access real stock-price quotes minute-by-minute even on a smart phone. So why does Finance then put forth the scientific or theoretical Equation Four below for stock-price (Po) when the fact of each stock price is so readily listed? Equation Four: Po W Divi Diva (1 + r.)² Divi (1+r) Div. + (1+r)

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