Find the price of a call option on the stock

Reference no: EM131158083

1. The current price of a stock is ksh. 40. In 1 year, the price will be either ksh.60 or ksh.30. The annual risk free rate is 5%. Find the price of a call option on the stock that has a strike price of sh 42 and that expires in one year.

2. On March 6, 2001, Cisco Systems was trading at $13.62. We will attempt to value a July 2001 call option with a strike price of $15, trading on the CBOT on the same day for $2.00. The following are the other parameters of the options: ·

The annualized standard deviation in Cisco Systems stock price over the previous year was 81.00%.

Reference no: EM131158083

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Find the price of a call option on the stock : The current price of a stock is ksh. 40. In 1 year, the price will be either ksh.60 or ksh.30. The annual risk free rate is 5%. Find the price of a call option on the stock that has a strike price of sh 42 and that expires in one year.

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