User Account

All Pages

Option pricing-risk neutral

Assignment Help Finance Basics
Reference no: EM131492654

Option Pricing-Risk Neutral

You try to price the put option on XYZ corp. The current stock price of XYZ is $100/share. The risk-free rate is 3%. What is the appropriate price of the 1 year put option of XYZ corp with a strike price of $110 using risk neutral approach? You project the stock price of XYZ will either be $100 or $140 in a year. Assume we live in a risk-neutral world where the returns on all assets are equal to the risk-free rate.

Reference no: EM131492654

Questions Cloud

Explain what accommodations would you implement : What accommodations/modifications would you implement? Explain. What elements of the accommodations/modifications would be most effective?
What were the ethical implications : For this assignment, please answer the following four questions- What did Milgram find out? What were the ethical implications
Evaluate the performance of a system software : Explain why it is important to monitor and evaluate the performance of a system's software as well as its hardware.
Description of how these theories will influence : Explanation of the three theories that you relate to most. Include the associated theorists.
Option pricing-risk neutral : You try to price the put option on XYZ corp. The current stock price of XYZ is $100/share. The risk-free rate is 3%.
Briefly summarize the three phases of ece governance : Briefly summarize the three phases of ECE governance and give an example of each phase. Address issues of Early Childhood Education Governance.
How much does the firm put in retained earnings : A firm has net income of $95,000. Dividends are $35,000.
Used to repurchase some of the firms outstanding shares : Puppypaws Inc. is publicly-traded company. The money raised from the sale of debt will be used to repurchase some of the firm’s outstanding shares.
What are credit default obligations : Use intuitive words to explain what are credit default obligations (CDOs) and credit default swaps (CDSs).

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd