A stock trades for $46 per share. A call option on that stock has a strike...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
A stock trades for $46 per share. A call option on that stock has a strike price of $54 and an expiration date twelve months in the future. The volatility of the stock's returns is 39%, and the risk-free rate is 4%. What is the Black and Scholes value of this option? The Black and Scholes value of this call option is $ (Round to the nearest cent.) A stock trades for $46 per share. A call option on that stock has a strike price of $54 and an expiration date twelve months in the future. The volatility of the stock's returns is 39%, and the risk-free rate is 4%. What is the Black and Scholes value of this option? The Black and Scholes value of this call option is $ (Round to the nearest cent.)
Expert Answer:
Posted Date:
Students also viewed these finance questions
-
Using a spreadsheet, compute the average return and standard deviation of each of the three asset classes. Compute the annual return of a portfolio consisting of 50% stocks, 40% real estate, and 10%...
-
Suppose the own price elasticity of market demand for retail gasoline is 0.9, the Rothschild index is 0.6, and a typical gasoline retailer enjoys sales of $1.2 million annually. What is the price...
-
The following figure is a probability density curve that represents the grade point averages (GPA) of the graduating seniors at a large university. a. Find the proportion of seniors whose GPA is...
-
Graph \(D\) Draw a minimum spanning tree for the given graph, and calculate its weight. 100 2.9 1.7 1.2 4 0 0 * d 30 3.1 3.5 4.3 40 Graph A Graph B Graph C Graph D
-
1. Describe the various services provided by logistics service providers. What is the role of these services in focal firms value-chain activities? 2. Supply-chain management has evolved over time,...
-
This project requires you to compare renting versus owning a home. Assume a property can be rented for $12,000 per year ($1,000 per month) or purchased for $150,000 with $30,000 down and financed...
-
The following income statement and selected balance sheetaccount data are available for Treece, Inc., at December 31, 2011:TREECE, INC. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31,2011Revenue: 2...
-
The Singer Division of Patio Enterprises currently earns $2.97 million and has divisional assets of $22 million. The division manager is considering the acquisition of a new asset that will add to...
-
Benefitsit Inc is working on calculating cost information for January. The beginning and ending inventories for the month of January are: 1-Jan 31-Jan Direct Materials $77,000 $82,000 Work in Process...
-
Charmaine works as a loan officer in a bank. She processes the applications for house mortgages for four different customers on the same day. All four mortgages have the same rate of interest and...
-
Given $150 million in investable funds, is it worth buying a company with Equity value of -$11,434.47 million calculated using DCF?
-
Prince Albert Canning PLC had a net loss of 4 6 , 7 3 1 on sales of 1 9 9 , 2 5 2 . a . What was the company's profit margin? b . In dollars, sales were $ 3 1 6 , 4 8 3 . What was the net loss in...
-
laura: Por qu ests tan callado, Javi? Todo va bien con la visita de tu madre, no? javier: Bueno, t sabes cmo es cuando viene. Me vuelve loco. laura: La verdad es que me parece menos exigente esta...
-
Test your confidence in the following Project Decisions: SI. # Question 01 02 03 04 05 06 07 08 09 10 How many years did it take to construct the largest Egyptian Pyramid- Pyramid of Cheops? When was...
-
Andrea Lima is attempting to sell her business to Alfonso Moreno. The company has assets of $1,800,000, liabilities of $1,600,000, and stockholders equity of $200,000. Both parties agree that the...
-
When faced with lawsuits, many companies recognize a loss and therefore credit a liability or reserve account for any future losses that may result. For instance, in the famous WorldCom case,...
-
Rothberg Corporations management took the following actions, which went into effect on January 2, 20x7. Each action involved an application of the time value of money. a. Established a new retirement...
Study smarter with the SolutionInn App