Question: please answer both question Q16. BlackScholes A call option has an exercise price of $65 and matures in six months. The current stock price is

please answer both question

Q16. BlackScholes A call option has an exercise price of $65 and matures in six months. The current stock price is $67, and the risk-free rate is 4 percent per year, compounded continuously. What is the price of the call if the standard deviation of the stock is 0 percent per year?

Answer:

15. BlackScholes - A call option has an exercise price of $80 and matures in six months. The current stock price is $84, and the risk-free rate is 5 percent per year, compounded continuously. What is the price of the call if the standard deviation of the stock is 0 percent per year?

Answer:

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Sunburn Sunscreen has a zero coupon bond issue outstanding with a $12,000 face value that matures in one year. The current market value of the firm's assets is $13,800. The standard deviation of the...

v A put option and a call option with an exercise price of $65 and three months to expiration sell for $5.27 and $1.04, respectively. If the risk-free rate is 3.1 percent per year, compounded...

3 pts Question 27 A call option has an exercise price of USD 35.00 and the current stock price is USD 36.50. If the call option is trading for a premium of USD 3.50, what is the time value embedded...

A call option with an exercise price of $65 and three months to expiration has a price of $4.05. The stock is currently priced at $64.80, and the risk-free rate is 4 percent per year, compounded...

A put option and a call option with an exercise price of $65 and three months to expiration sell for $1.30 and $5.50, respectively. If the risk-free rate is 4.6 percent per year, compounded...

A put option and a call option with an exercise price of $ 6 5 and three months to expiration sell for $ 2 . 9 9 and $ 4 . 4 9 , respectively. If the risk - free rate is 4 . 8 percent per year,...

A put option and a call option with an exercise price of $65 and three months to expiration sell for $1.25 and $5.50, respectively. If the risk-free rate is 4.3 percent per year, compounded...

A put option and a call option with an exercise price of $65 and four months to expiration sell for $2.55 and $4.45, respectively. If the risk-free rate is 5.2 percent per year, compounded...

A put option and a call option with an exercise price of $65 and three months to expiration sell for $5.27 and $1.04, respectively. If the risk-free rate is 3.1 percent per year, compounded...

A put option and a call option with an exercise price of $65 and three months to expiration sell for $1.50 and $4.50, respectively. If the risk-free rate is 4.6 percent per year, compounded...

The total spending variance for direct materials can be broken down into which two variances? Multiple Choice materials price variance and materials rate variance materials production variance and...

Which of the following is least likely to be considered an inherent risk relating to receivables and revenues? Multiple Choice O O Decline in sales due to economic declines. Restrictions placed on...

Stinnet Transmission Inc has the following esitmates for its new gear assembly project: Price = $ 1 2 2 0 per unit; variable costs = $ 3 8 0 per unit; fixed costs = $ 3 . 7 5 million; quantity = 9 0...

Within a continuously competitive global business environment, publicly held companies face constant pressure to generate and report positive financial results. Unfortunately, some leaders may be...

=+1. Why is excellent writing for social media important for professionals and brands today?

=+2. What is the difference between brand voice and tone?

=+2. Samsung is looking to engage and build brand awareness with Generation Z about its new Samsung Notes product. Write two primary messages and two secondary messages for this audience. You will...