Assume that the anticipated future dividends from MeMeStock Corporation is zero (that is, all positive earnings...

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Assume that the anticipated future dividends from MeMeStock Corporation is zero (that is, all positive earnings are plowed back into the firm). a) Compute the value of a European put option written on that stock if current share price (So) is $85 exercise or strike price (K) is $75 stock has a standard deviation (volatility) of 20% per year the put option matures in 6 months (T) risk-free interest rate per annum is 1.5% (2p) b) How large is the time value of the option? (2 p) c) Is the option in-the-money, at-the-money or out-of-the-money? (2 p) Assume that the anticipated future dividends from MeMeStock Corporation is zero (that is, all positive earnings are plowed back into the firm). a) Compute the value of a European put option written on that stock if current share price (So) is $85 exercise or strike price (K) is $75 stock has a standard deviation (volatility) of 20% per year the put option matures in 6 months (T) risk-free interest rate per annum is 1.5% (2p) b) How large is the time value of the option? (2 p) c) Is the option in-the-money, at-the-money or out-of-the-money? (2 p)

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