What is the value of a one-year european call option

Assignment Help Finance Basics
Reference no: EM13266900

A stock price is currently $100. Over each of the next two six-month periods it is expected to go up by 10% or down by 10%. The risk-free interest rate is 8% per annum with continuous compounding. What is the value of a one-year European call option with a strike price of $100?

Reference no: EM13266900

Questions Cloud

Analyse the credit approval data set : Analyse the  Credit Approval  data set - A data set description in terms of the attributes present in the data, the number of instances,missing values, and other relevant characteristics.
Find out the molecular formula of an unknown : Determine the molecular formula of an unknown perfect gas composed primarily of Nitrogen and Oxygen. At -3 degrees Celsius and when the pressure is 101.325kPa the density is 1.354 g/L.
Explain take just as bubble cease from the bell : In the ultramicro-boiling point determination, why is the b.p take just as bubble cease from the bell. what is inside these bubbles
Is there any advantage or disadvantages to a type of memory : A new 24-bit processor is being designed for operation in a cell phone (you can assume the word-size is 24 bits). Suppose the following memory values are being stored in memory that is organized where each location is 8-bits wide (byte addressable..
What is the value of a one-year european call option : A stock price is currently $100. Over each of the next two six-month periods it is expected to go up by 10% or down by 10%. The risk-free interest rate is 8% per annum with continuous compounding. What is the value of a one-year European call opti..
Explain the original pressure before the compression : A gas in a container is expanded by 0.25 of the original volume to a total of 15 dm^3 at constant temperature. The resultant pressure is 20 bar. What was the original pressure before the compression assuming perfect gas behavior
Indicate the inputs and final result in decimal : Computer the following assuming each number is a two's complement number and indicate the inputs and final result in decimal. Also, indicate if the number overflows. a. 01 + 1011 b. 11 + 01010111 c. 1101 + 110 d. 01 + 10 e. 111 + 111111
Describes a suitable methodology from the literature : Describes a suitable methodology from the literature for the purpose of designing, constructing and testing of a commercial BIDW for a multinational company.
Explain oxygen act like a perfect gas : It was determined in an experiment that a balloon filled with O2 gas with mass 32.0g in a 1.0 dm^3 volume exerts 21.6 atm of pressure at 0 degrees Celsius. Does Oxygen act like a perfect gas

Reviews

Write a Review

 

Finance Basics Questions & Answers

  Calculations of loan fees income

An FI makes a loan commitment of $2,500,000 with an up-front fee of fifty basis points and a back-end fees of 25 basis points on the unused portion of loan. The takedown on the loan is 50 percent.

  Use break-even analysis to determine

Use break-even analysis to determine if this new service is financially viable. If the business is not financially viable, what steps could you take to make a case to proceed with implementation?

  Mergers-divestitures-holding companies-liquidations

What is the basic financial rationale for mergers, divestitures, holding companies, liquidations, spin-offs, and reorganization?

  Calculation of total revenues

The Gold Rush Mining Corporation is concerned about short-term volatility in its revenues. Gold currently sells for $300 an ounce, but value is volatile and could fall as low as $280 or rise as high as $320 in the next month.

  What is the irr for the gold mine

After 11 years, the mine will be abandoned. Abandonment costs will be $114,000 at the end of year 11.

  Which is the important factor

In determining the cost of bank financing, which is the important factor?

  Find the profit received by the nursing home

A not-for profit nursing home has total expenses of $20 million, sales tax in the state is 7 percent, expenses are broken down into salaries (12 million dollar), supplies (6 million dollar), and pharmacy (2 million dollar).

  Nci-parent bonds from unaffiliated parties

At the beginning of the year, an 80 percent owned subsidiary acquired a parent's bonds from unaffiliated parties at a gain of $20,000.

  What is the apr

XXX offers credit to its customers at a rate of 1.6 percent per month. What is the APR? What is the effective annual rate of this credit offer?

  The demand for milk is more elastic than demand for water

The demand for milk is more elastic than the demand for water. Assume the government levies an equivalent tax on milk also water.

  Investment management

I am looking for assistance in the area of services of a stock broker and estate planner. I understand that they are individuals that assist people of all income variations who are attempting to set money aside from their financial earnings to invest..

  Solution to future values

Evaluate the future values of following first assuming that payments are made on the last day of the period and then assuming payments are made on the first day of the period:

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