Find price for call option

Assignment Help Finance Basics
Reference no: EM13281226

Find price for call option. Use Black Scholes to calculate. The current price of stock = $32, the strike price = $35, the time to expiration = 6 months, the annualized risk-free rate = 3%, the variance of stock return = 0.26. Round answer to nearest cent.

Reference no: EM13281226

Questions Cloud

What is your payoff is you select the cash option : If the discount rate that the Lottery Commission uses to determine the lump sum payoff is 7%, what is your payoff is you select the cash option?
Find her altitude as she crosses the bar : A 48 kg pole vaulter running at 11 m/s vaults over the bar. Her speed when she is above the bar is 1.0 m/s. determine her altitude as she crosses the bar
What is the payment pattern : Review the payout ratio over a 10-year time period. What is the payment pattern? What does this tell you about the firm in the life-cycle? This question is for both Walmart and Target please help
What is the npv of his retainer offer : Assuming that Dewey's cost of capital is 12% EAR, what is the NPV of his retainer offer?
Find price for call option : Find price for call option. Use Black Scholes to calculate. The current price of stock = $32, the strike price = $35, the time to expiration = 6 months, the annualized risk-free rate = 3%, the variance of stock return = 0.26. Round answer to neare..
Compute the kinetic energy of the ball : An outfielder throws a 0.150 kg baseball at a speed of 20.0 m/s and an initial angle of 30.0°. What is the kinetic energy of the ball
How much is the effective stress left in steel : An ordinary mild steel bar has been presented to working stress of 200 MPa.Youngs modulus of steel = 200 GPa.Permanent negative strain due to shrinkage and creep is 0.0008. How much is the effective stress left in steel?
Compute the incremental income after taxes : If the receivable turnover ration is 4 to 1, and no other asset buildup is needed to serve the new customers, what will Johnson's incremental return on new average investment be?
Find resulting potential difference across each capacitor : A 110 pF capacitor and a 440 pF capacitor are both charged to 2.2 kV. They are then disconnected from the voltage source and are connected together, positive plate to positive plate and negative plate to negative plate.

Reviews

Write a Review

Finance Basics Questions & Answers

  What is value of the bonds

Suco co needs $800,000 to develop a plant. It issues a $1,000 par value bond with a coupon rate of 12 percent and 15 years maturity. The investors rate of return of 12 percent.

  Computing present value of stock by retention rate on equity

Retention rate and experience the return on equity of 14%. The required rate of return for investor is 12.5%. Compute the present value of the stock is?

  Valuation corporate bond

A $1,000 corporate bond with 10 years to maturity pays a coupon of 8% (semi-annual) and the market required rate of return is a) 7.2% and b) 10%. What is the current selling price for a) and b)?

  Treasury bond interest rates

Assume you own the 8% October 2008 treasury bond and it is expected that the market interest rate will increase from 8% to 9% in the next three months.

  What is the projects npv

Warnock Inc. is considering a project that has the following cash flow and WACC data.  What is the project's NPV?  Note that a project's projected NPV can be negative, in which case it will be rejected.

  Time value of money in economic decisions

Please describe why the time value of money is significant in an economic decision and how NPV and payback period are used in business to incorporate the time value of money into operational decision.

  What are the totals of assets and liabilities for business

They also have $18,500 in business equipment they own, and owe $1,600 in loans for new equipment. According to this list, what are the totals of assets and liabilities for the business?

  Impact of wacc on capital budgeting and structure

Summarize the different capital structure concepts addressed by answering the following questions: What impact does WACC have on capital budgeting and structure?

  What must the coupon rate be on merton bonds

Merton Enterprises has bonds on the market making annual payments, with 14 years to maturity, and selling for $967. At this price, the bonds yield 7.9 percent. What must the coupon rate be on Merton's bonds?

  What is the cross-rate in terms of yen per pound

Assume that U.S. six-month Treasury bills have an annualized rate of 6.2% while default-free Japanese bonds that mature in six months have an annualized rate of 5.0% and that interest rate parity holds. Find the six-month forward exchange rate in ..

  What is the expected percentage return on this stock

You forecast that there is a 30% chance the stock will sell for $30.00 at the end of one year. The alternative expectation is that there is a 70% chance the stock will sell for $10.00 at the end of one year. What is the expected percentage return ..

  Discuss the benefits of financial preparedness

Discuss the benefits of financial preparedness? How can you improve personal financial plan in order to be better prepared for life's unexpected expenses?

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