A. Kaylyak purchased 20 European call contracts on stock KAYAK. The con- tracts each have a...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
A. Kaylyak purchased 20 European call contracts on stock KAYAK. The con- tracts each have a strike price of 270 and expiration time of 6 months. The initial stock price was 250, and the stock price was 300 at expiration. With a risk-free rate of 0.05, Kaylyak's profit was 200. What was the premium for one call contract? Round your response to two decimal places. A. Kaylyak purchased 20 European call contracts on stock KAYAK. The con- tracts each have a strike price of 270 and expiration time of 6 months. The initial stock price was 250, and the stock price was 300 at expiration. With a risk-free rate of 0.05, Kaylyak's profit was 200. What was the premium for one call contract? Round your response to two decimal places.
Expert Answer:
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
Students also viewed these finance questions
-
KYC's stock price can go up by 15 percent every year, or down by 10 percent. Both outcomes are equally likely. The risk free rate is 5 percent, and the current stock price of KYC is 100. (a) Price a...
-
TServices has a calculated beta of 0.9. The current risk-free rate is 2.11% and you expect the market return to be 15.42%. Based on the CAPM, what is the expected rate of return of the firm? Submit...
-
The following table lists the prices of a small market basket purchased in both 2012 and 2022. Assuming that this basket of goods is representative of all goods and services. a, b. Compute the cost...
-
You are the manager of a fast food restaurant. Part of your job is to report to the boss at the end of the day which special is selling best. Use your vast knowledge of descriptive statistics and...
-
A cylinder fitted with a frictionless piston that is restrained by a linear spring contains R-22 at 20C, quality 60% with a volume of 8 L. The piston cross-sectional area is 0.04 m2, and the...
-
Find the matching item from the second column. Union (a) P(A and B) P(A) P(B) (b) A c (c) S (d) P(A or B) + P(A and B) = P(A) + P(B) (e) P(A or B) P(A) + P(B) (f ) A and B (g) P(A and B) = 0 (h) A...
-
The three criteria for effective negotiation are ____________. (a) harmony, efficiency, and quality (b) quality, efficiency, and effectiveness (c) ethical behavior, practicality, and...
-
For each of the following situations, evaluate the segregation of duties implemented by the company and indicate the following: a. Any deficiency in the segregation of duties described (Indicate None...
-
(a); (b)14; (c) 8. A particle moves along a line so that its velocity at time t is v(t) =t-1 (measured in meters per second). Find the displacement of the particle during the time period 0
-
Guitar Universe, Inc., is a popular source of musical instruments for professional and amateur musicians. The companys accountants make necessary adjusting entire monthly, and they make all closing...
-
A European-style call option and a European-style put option share the same underlying stock, same time to maturity of three months, and same exercise price of $55. The put option is priced at $6.70....
-
List and explain nine types of representations that may be obtained from management.
-
A client has a large and active investment portfolio that is kept in a bank safe deposit box. If the auditor is unable to count the securities at the balance sheet date, the auditor most likely will...
-
How does the auditor explain in the audit report his or her responsibility for the detection of errors and fraud?
-
Two months before year-end, the bookkeeper erroneously recorded the receipt of a long-term bank loan by a debit to cash and a credit to sales. Which of the following is the most effective procedure...
-
In auditing the amount of goodwill recorded by a client, an auditor can obtain the most convincing evidence by comparing the recorded value of assets acquired with the a. Appraised value as evidenced...
-
. The price ofa European call option on a stock with a strike price of $100 and a time to expiration of1 year is $12. The stock price is $102 and a dividend of $2 is expected in six months. The...
-
What is an insurable interest? Why is it important?
-
Jerry made the following contributions during 2012: His synagogue (by check).....................................................$680 The Democratic Party (by check)...
-
Janie graduates from high school in 2012 and enrolls in college in the fall. Her parents pay $4,000 for her tuition and fees. a. Assuming Janie's parents have AGI of $170,000, what is the American...
-
Deborah purchases a new $30,000 car in 2012 to use exclusively in her business. If Deborah does not elect to expense or take bonus depreciation in 2012 and holds the car until it is fully...
-
Materials support cost for the Industrial Equipment Manufacturing Company depends on the weight of material (plate steel, castings, etc.) moved. For the current budget period and based on scheduled...
-
Parks Canada prepared the following budget for one of its national parks for 2006: The fees were based on an average of 50,000 vehicle-admission days (vehicles multiplied by number of days in park)...
-
The L. Ming Company has had great difficulty controlling costs in Singapore during the past three years. Last month a standard cost and flexible-budget system was installed. Results for a department...
Study smarter with the SolutionInn App