Question: Hello I need help with question 2 & 3 Need help w questions 2 & 3. For all questions below assume time discount rate of
Need help w questions 2 & 3. For all questions below assume time discount rate of aero Q1. You believe stock price by yc end will have the folowing multinomial distribution Price Peobability 80)0% 9020% 110 20% 120 0% Qla. What should be the stock price TODAY Q1b. what is the prob that a 95 strike put will expire ITM? Qle. what is the conditional average price of underlying stock when 93 strike put expire ITM? Qld. based on Qlb and Qle, how much should the 95 put be priced at? Qle. do Qlb d for 95 call. 02. Underlying at 5100 and MAD a sio. PUT option has strike of $95 Q2a. What is the probability for PUT to be in the money? 2b. What is the average price of the underlying condizional ce PUT expiring ITM? Qe. Based on Q2a and Q2b, how much should the 95 PUT b priced at? Q24. For Q2e PUT price, how much of it is time value and how much is intrinsic value (aka exercise value)? Q3. Underlying at 5100 and MAD a Sio CALL option has strike of s95. Q3a. What is the probability for CALL to be in the money expiration? 3%. What is the average price of the underlying condzional oe CALL expiring ITM Qle. Based on Q3a and Q3b, how much should the 95 CALL be priced a Q3d. For Q3c CALL price, how much of it is time value and how much is imrimic valoe (aka exercise value)? Need help w questions 2 & 3. For all questions below assume time discount rate of aero Q1. You believe stock price by yc end will have the folowing multinomial distribution Price Peobability 80)0% 9020% 110 20% 120 0% Qla. What should be the stock price TODAY Q1b. what is the prob that a 95 strike put will expire ITM? Qle. what is the conditional average price of underlying stock when 93 strike put expire ITM? Qld. based on Qlb and Qle, how much should the 95 put be priced at? Qle. do Qlb d for 95 call. 02. Underlying at 5100 and MAD a sio. PUT option has strike of $95 Q2a. What is the probability for PUT to be in the money? 2b. What is the average price of the underlying condizional ce PUT expiring ITM? Qe. Based on Q2a and Q2b, how much should the 95 PUT b priced at? Q24. For Q2e PUT price, how much of it is time value and how much is intrinsic value (aka exercise value)? Q3. Underlying at 5100 and MAD a Sio CALL option has strike of s95. Q3a. What is the probability for CALL to be in the money expiration? 3%. What is the average price of the underlying condzional oe CALL expiring ITM Qle. Based on Q3a and Q3b, how much should the 95 CALL be priced a Q3d. For Q3c CALL price, how much of it is time value and how much is imrimic valoe (aka exercise value)
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