The current spot price of a stock is $32.00, the expected rate of return of the...

   

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The current spot price of a stock is $32.00, the expected rate of return of the stock is 6.9%, and the volatiity is 21%. The risk-free rate is 4.4%. Compute the price of a derivative whose payoff in 11 months is - In(S) + 32 Where S denotes the stock price in 11 months. Enter your solution as a dollar value, including dollar symbol ($), to two decimal places. In this chapter, assume the log-normal model. Unless otherwise stated, assume no arbitrage opportunities The current spot price of a stock is $32.00, the expected rate of return of the stock is 6.9%, and the volatiity is 21%. The risk-free rate is 4.4%. Compute the price of a derivative whose payoff in 11 months is - In(S) + 32 Where S denotes the stock price in 11 months. Enter your solution as a dollar value, including dollar symbol ($), to two decimal places. In this chapter, assume the log-normal model. Unless otherwise stated, assume no arbitrage opportunities

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Solution cucreut spet price expected seate 32 of utun 69 Volatility 21 seis... View the full answer