Question: You are given: 1) The current stock price is 50 ii) The stock pays dividends continuously at a rate proportional to its price. The dividend
You are given: 1) The current stock price is 50 ii) The stock pays dividends continuously at a rate proportional to its price. The dividend yield is 2% iii) The continuously compounded risk-free interest rate is 3% iv) The following 6-month barrier on option prices: Down-and-in call with a barrier of 48 and a strike of 52 has a price of 3.2031 Down-and-out call with a barrier of 48 and a strike of 52 has a price of 1.6404 Down-and-in put with a barrier of 48 and a strike of 52 has a price of 5.7879 Calculate the price of a 6-month down-and-out put with a barrier of 48 and strike of 52. O A. 0.78 O B. 178 O C. 2.78 O D. 3.78 O E.4.78 You are given: 1) The current stock price is 50 ii) The stock pays dividends continuously at a rate proportional to its price. The dividend yield is 2% iii) The continuously compounded risk-free interest rate is 3% iv) The following 6-month barrier on option prices: Down-and-in call with a barrier of 48 and a strike of 52 has a price of 3.2031 Down-and-out call with a barrier of 48 and a strike of 52 has a price of 1.6404 Down-and-in put with a barrier of 48 and a strike of 52 has a price of 5.7879 Calculate the price of a 6-month down-and-out put with a barrier of 48 and strike of 52. O A. 0.78 O B. 178 O C. 2.78 O D. 3.78 O E.4.78
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