Find the price of the put option using the simulated stock

Assignment Help Financial Management

Reference no: EM131924108

Please find the price of the put option using the simulated stock prices. The put option matures in 1 year and has exercise price $30. The price of the underlying stock is $30 today. The average annual stock return is 5%. The annualized stock volatility is 15%. The interest rate on the risk-free asset is 5% per year. Please simulate the end of year stock price for 1000 times. Using Excel.

Reference no: EM131924108

Questions Cloud

What would an investor been willing to pay : What would an investor with perfect foresight of the above been willing to pay for KCP at the start of 2006? (Note: Because an investor with perfect foresight.

Calculate annual cash flow : The company has a tax rate of 40%, calculate the annual cash flow.

What will be the cash flows of project in millions : Your firm is considering an overseas expansion. What will be the cash flows of this project in millions?

Calculate cash flow from operations : In 2012, Usher Sports Shop had cash flows from investing activities of -$4,544,000 and cash flows from financing activities of -$5,970,000.

Find the price of the put option using the simulated stock : Find the price of the put option using the simulated stock prices. Please simulate the end of year stock price for 1000 times.

What is the real or inflation-free rate per year : In 2000, a gift of $1 million was invested in government bonds at an interest rate of 3% per year. Inflation is 2% from 2000 to 2015.

Risk-free asset to replicate the payoff of the put option : Please use binomial option pricing model to find the price of the put option. The put option matures in a year and has exercise price $30.

Review problem related to operating cash flow : The 2008 balance sheet of Maria's Tennis Shop, Inc., showed $3 million in long-term debt, $770,000 in the common stock account, and $6.15 million.

Discuss internal controls of protecting shareholder rights : In 2002, after the accounting deceptions of the management of many multi-million dollar corporations (with Enron being the benchmark name of that time period).

User Account

All Pages