Explain the implied volatility

Assignment Help Finance Basics
Reference no: EM131114152

Find the price of a six month european call option on a non-dividend paying stock with a strike price of 20 when the current stock price is 18, the risk free rate is 6% per annum and the volatility is 30 per annum. Use the Black scholes merton model.

Explain the implied volatility.

Reference no: EM131114152

Questions Cloud

How many gates would such a system require : Develop a two-dimensional addressing system using a 6-to-64 decoder, a 64-word×128- bit matrix, and 16-input multiplexers. How many gates would such a system require?
How would the results be used to make a diagnosis : Explain what physical exams and diagnostic tests would be appropriate and how the results would be used to make a diagnosis. List five different possible conditions for the patient's differential diagnosis, and justify why you selected each.
Determine the value of the company shares : The average growth of dividends for the past five years is expected to persist in the foreseeable future. You are required to determine the value of the company's shares after payment of the dividend of 2004.
How many records would you expect would be removed : A dataset has 1000 records and 50 variables with 5% of the values missing, spread randomly throughout the records and variables. About how many records would you expect would be removed?
Explain the implied volatility : Find the price of a six month european call option on a non-dividend paying stock with a strike price of 20 when the current stock price is 18, the risk free rate is 6% per annum and the volatility is 30 per annum. Use the Black scholes merton mod..
Describe the two families in the film : Describe the two families in the film (ie the names of the family, people in household, jobs held, current financial situation,etc) - Did race impact the families lives? Explain
Minimum average collection period : The minimum average collection period required to approve the cash discount plan is _________days?
Show a block diagram of an srff connected to store 1 bit : Using 4 SRFFs obtain the block diagram for an SISO shift register.
Find the price of two year american put option : A stock price is 80. The price is expected to increase by 20% or decrease by 30% every year. the RFR is 9 per annum with continuous compounding . Using the two-step binomial tree find the price of its two year American put option with a strike pri..

Reviews

Write a Review

Finance Basics Questions & Answers

  On january 1 2013 gibson corporation entered into a

on january 1 2013 gibson corporation entered into a four-year operating lease. the payments were as follows. 21000 in

  Calculate the future value of an investment

Calculate the future value of an investment

  Are bank mergers and acquisitions good for the economy

Are bank mergers and acquisitions good for the economy? How about the shareholder? What impact will it have on the customer? Do customers gain value, perhaps through economies of scale? Is bigger necessarily better?

  An investor recently purchased a corporate bond which

an investor recently purchased a corporate bond which yields 9 percent. the investor is in the 36 percent tax bracket.

  Effect of inflation on purchasing power of bond

ourteen years ago, the U.S. Aluminum Corporation borrowed $9.9 million. To sustain the original $9.9 million purchasing power, how much must the lender be repaid? (Hint: Multiply the loan amount by one plus cumulative inflation).

  Abc company stock has a required return of 12 and the stock

problem iabc company stock has a required return of 12 and the stock sells for 40 per share. the firm just paid a

  Computation of incremental cash flows and free cash flows

Computation of incremental cash flows and free cash flows and What is the present value of the free cash flows of this project

  Describe and construct a matrix in excel

Zappos Shoes has decided to launch a reactivation campaign to customers who have lapsed and not purchased in 12 months or longer. They are testing various components of the test including:

  Mean and standard deviation of 100 items are found to be

mean and standard deviation of 100 items are found to be 40 and 10 . if at the the time of calculation two items are

  What would the capital surplus be

Holden Bicycles has 2,000 shares outstanding each with a par value of $0.50. If they are sold to shareholders at $12 each, what would the capital surplus be?

  Hartzell inc had the following data for 2010 in millions

hartzell inc. had the following data for 2010 in millions net income 600 after-tax operating income ebit 1-t 700 and

  Actual proportion of cell phone

A survey was conducted to determine what adults prefer in cell phone services. The results of the survey showed that 73% of cell phone users wanted e-mail services, with a margin of error of }4%. What is meant by the phrase "}4%"?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd