Call options and puts on stock

Assignment Help Financial Management
Reference no: EM131562493

It is possible to buy three-month call options and three-month puts on stock Q. Both options have an exercise price of $64 and both are worth $14.

If the interest rate is 6.15% a year, what is the stock price? (Hint: Use put–call parity.) (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Stock price            $

Reference no: EM131562493

Questions Cloud

What are arithmetic and geometric returns for stock : What are the arithmetic and geometric returns for the stock?
Company is considering infusing in new mining project : Iangshan mining company is considering infusing in a new mining project. Calculate the projects NPV
Two projects being considered are mutually exclusive : Two projects being considered are mutually exclusive and have the following projected cash flows.
Which combination will produce the same results : Suppose that puts on Triangular stock are not traded, but you want to buy one. Which combination will produce the same results?
Call options and puts on stock : It is possible to buy three-month call options and three-month puts on stock Q. If the interest rate is 6.15% a year, what is the stock price?
The firm will not be issuing any new stock. : The firm will not be issuing any new stock. What is SMH's WACC?
Bonds two years ago at coupon rate : Night Hawk Co. issued 16-year bonds two years ago at a coupon rate of 9.5 percent.
Calculate the annual depreciation tax shield of year : Calculate the annual depreciation tax shield of Year 1 provided by this equipment for Medley Corp.
Calculate the end-of-the-year book value of year : Calculate the end-of-the-year book value of Year 4 for this equipment.

Reviews

Write a Review

Financial Management Questions & Answers

  Cash flows over the four-year life of the investment

An investment has an installed cost of $535,800. The cash flows over the four-year life of the investment are projected to be $213,850, $230,450, $197,110, and $145,820. If the discount rate is zero, what is the NPV?

  Real dollars and the average inflation rate is expected

Frank wants to have $2,000,000 in his retirement account when he retires 30 years from now. If he expects a return of 8%, how much does he need to invest monthly?  Same as (1), but now Frank wants to have $2,000,000 in real dollars and the average in..

  Accounts receivable-what is the effective annual rate

A firm has $500,000 in accounts receivable. A commercial bank will accept these accounts receivable as collateral and will advance the firm 75% of the accounts receivable amount on loan at 6%. The bank charges a $5,000 credit checking fee. The firm w..

  What is this firms market-to-book ratio

A firm has current assets that could be sold for their book value of $10 million. The book value of its fixed assets is $60 million, but they could be sold for $90 million today. The firm has total debt with a book value of $40 million, but interest ..

  Botanist has produced a new variety of hybrid wheat

A botanist has produced a new variety of hybrid wheat that is better able to withstand drought than other varieties. The botanist knows that for the parent plants, the proportion of seeds germinating is 80%. The proportion of seeds germinating for th..

  Does the npv rule recommend the same action

Your cost of capital is 30% per annum.  - Use the IRR rule to determine whether you should take this project. Does the NPV rule recommend the same action?

  Semiannual coupon bond matures

An 7% semiannual coupon bond matures in 4 years. The bond has a face value of $1,000 and a current yield of 7.4185%. What is the bond's price? What is the bond's YTM?

  Annual coupon bond with a face value

Consider an eight-year, 13 percent annual coupon bond with a face value of $1,000. The bond is trading at a rate of 10 percent.

  Explain the process of a money market hedge

Explain the process of a money market hedge and compute the dollar cost of meeting the yen obligation.

  Unlimited liability for the obligations of their business

The liability of those who own a corporation is limited to their investment, while proprietors and general partners have unlimited liability for the obligations of their business. Explain what relevance this has for risk management.

  Changes in the interest rates-high quality or low quality

Would high quality bonds higher or lower coupons everything else the same? Which one would be more sensitive to changes in the interest rates, high quality or low quality?

  Create portfolio that has an expected return

You have $100,000 to invest in either Stock D, Stock F, or a risk-free asset. You must invest all of your money. Your goal is to create a portfolio that has an expected return of 10.6 percent. Assume D has an expected return of 14.1 percent, F has an..

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