A stock is currently trading at $50. The risk free interest rate is 4%. In one year,analysts
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Question:
A stock is currently trading at $50. The risk free interest rate is 4%. In one year,analysts believe that share price will either be 58 or 36.
a). Find the value of 1-year Put option with strike price 42 with Risk Neutral and Binomial method.
b). What is the intrinsic value of the option? The time value?
c).What would the value of a Call with the same strike price and maturity be?
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