What is price of call option with the same exercise price

Assignment Help Financial Management
Reference no: EM131068933

A put option that expires in six months with an exercise price of $30 sells for $4.10. The stock is currently priced at $27, and the risk-free rate is 3.2 percent per year, compounded continuously.

What is the price of a call option with the same exercise price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Reference no: EM131068933

Questions Cloud

Discuss the benefits provided by network modeling : Discuss the benefits provided by network modeling
Who has been granted an interview regarding an it position : ITECH7402 Professional IT Culture. What advice is available for a new graduate to produce an effective application regarding an IT position to be filled? What advice is available for a new graduate who has been granted an interview regarding an IT po..
Human resource planning in organisation : Examine the pricincples underpinning the Skills Development Act and the Skills Development Levies Act and discuss the implication of this for human resource planning in your organisation. (still Finland, Russia and SA assignment)
Authoritative works of experts in the field : In 800 words, Research the company Health Care Corporation of America competitive environment over the course of its history since 1990 using scholarly and professional journals and other authoritative works of experts in the field.
What is price of call option with the same exercise price : A put option that expires in six months with an exercise price of $30 sells for $4.10. The stock is currently priced at $27, and the risk-free rate is 3.2 percent per year, compounded continuously. What is the price of a call option with the same exe..
Different types of organizational structures : Define the different types of organizational structures. Identify approaches typically used to design organizational structures.
What results do you expect to get from this change : Analyze your results for the Student Listening Inventory. What do you do well? What can you improve on? What changes can you make in your behavior to become a better listener? What results do you expect to get from this change?
What do you feel are types of decisions a company must make : What do you feel are types of decisions a company must make when choosing an inventory valuation method? What is the relationship of this decision to the cost of goods sold for the company? Explain your reasoning.
What is the impact of tax on firm desired level of capital : Assume that a firm pays taxes on revenue and is allowed some deductions. What is the impact of the tax on the firm's desired level of capital in the last case?

Reviews

Write a Review

Financial Management Questions & Answers

  What is the variance of the returns on stock

If the economy booms, RTF, Inc. stock is expected to return 13 percent. If the economy goes into a recessionary period, then RTF is expected to only return 5 percent. The probability of a boom is 83 percent while the probability of a recession is 17 ..

  What is the value of this obligation

Suppose that you have an obligation to make payments of $5 million in five years and $5 million in ten years. The yield on a five-year zero coupon bond is 5% and the yield on a ten-year zero coupon bond is 7%. What is the value of this obligation?

  What is the duration of assets-da-liabilites and equity

Consider the following bank balance sheet (fixed rates and pure discount securities unless indicated otherwise). Interest rates on liabilities are 10 percent and on assets are 12 percent. (See link for data) What is the duration of assets, DA, liabil..

  What is the level of current liabilities for project

For project A, the cash flow effect from the change in net working capital is expected to be -500 dollars at time 2 and the level of net working capital is expected to be 1,300 dollars at time 2. What is the level of current liabilities for project A..

  Organizations need to go global in order to stay competitive

"The world is at your fingertips! Why do businesses go global?" Please respond to the following: Give two (2) reasons explaining why you think organizations have an advantage going global now as compared to twenty years ago. Explain whether or not yo..

  What is the relationship between the net present value

What is the relationship between the Net Present Value and the Profitability Index? Will they lead to the same conclusion? Why or why not?

  Issued some new preferred stock

E-Eyes.com just issued some new preferred stock. The issue will pay an annual dividend of $15 in perpetuity, beginning 20 years from now. If the market requires a return of 4.5 percent on this investment, how much does a share of preferred stock cost..

  What is the present value of that annuity if discount rate

You are considering preferred stock that pays a quarterly dividend of $1.50. If your desired return is 3% per quarter, how much would you be willing to pay? An investment will provide you with $100 at the end of each year for the next 10 years. What ..

  The club has zero discount rate and loses

The club charges a membership fee of $35 per year. The membership entitles George join 6 hikes a year, which he utilizes to the maximum. During a hike, he usually buys some hiking equipment and a sports drink from the club. On average, he spends $60 ..

  About the business organizations

Business Organizations – Georgio’s Fashions is a business established in Little Rock, Arkansas. In each of the following situations, determine whether Georgio’s is a sole proprietorship, a general partnership, a limited partnership, a limited liabili..

  What is the cash price rounded to the nearest whole number

It is May 1, and the quoted price of a bond with an Actual/365 day count and 8% per annum coupon in the United States is 104. It has a face value of 100 and pays coupons on April 1 and October 1. What is the cash price rounded to the nearest whole nu..

  Currency risk management techniques include forward hedges

Currency risk management techniques include forward hedges, money market hedges, and option hedges. Draw a diagram showing the possible outcomes of these hedging alternatives for a foreign currency receivable contract.

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