What is the value of a six-month european call

Assignment Help Finance Basics
Reference no: EM131893870

A futures price is currently 40 dollars. It is expected to move up to 44 dollars or down to 34 dollars in the next six months. The continuously-compounded risk-free interest rate is 6% per annum. What is the value of a six-month European call on the futures contract with a strike price of 40 dollars?

Reference no: EM131893870

Questions Cloud

Us inflation expectation for the time the bond : US inflation expectation for the time the bond will be issued increased from 0.5% per year to 4.5% per year. The current price of the bond must be?
What is the net present value of each alternative : Should you buy the equipment or lease it at $75,000 per month for 60 months with maintenance included? What is the net present value of each alternative?
Hedge against the prospect of higher corn prices : To hedge against the prospect of higher corn prices, the company purchases 5 call options on corn with a strike price of $3.75 and a cost of $0.14703
What is your incremental cash flow from selling the machine : If you sell the machine right now (after three years of depreciation) for $794,000, what is your incremental cash flow from selling the machine?
What is the value of a six-month european call : What is the value of a six-month European call on the futures contract with a strike price of 40 dollars?
Review two articles on group decision making : Review at least two academically reviewed articles on Group Decision Making. text book- Making The Team (5th Edition) by Thompson.
Owners equity accounts for alexander international : The owners’ equity accounts for Alexander International are show below: How many shares will be outstanding? What is the new par value per share?
Identify the groups that forming higher education policy : Identify three of the major interest groups involved in forming higher education policy, and discuss their differing goals.
What would be the monthly payment : If the dealer is offering 100% financing at 7.6% APR compounded monthly for a 5 year loan, what would be the monthly payment?

Reviews

Write a Review

Finance Basics Questions & Answers

  Use the technical forecasting technique

As a financial analyst, you are asked to advise a MNC about its one-year investment plan next year in Germany. Because the investment is denominated in euros, you are asked to forecast how the euro's value may change against the U.S. dollar ove..

  Would the risk premium on a high-beta stock increase

If investors' aversion to risk increased, would the risk premium on a high-beta stock increase more or less than that on a low-beta stock? Explain.

  What was the amount of operating profit for each division

ROI was 10 percent for both divisions, while asset turnover was 5 for mattress sets and 2 for bed frames. What was the amount of operating profit for each division?

  Annuity to achieve their goal

How much will Karine and Arlo have to contribute each year to the annuity to achieve their goal? Create a schedule showing the cash inflows (including interest) and outflows of this fund. How much will be in the fund on Amelia's 16th birthday?

  Bill anders retires in 8 years he has 650000 to invest and

bill anders retires in 8 years. he has 650000 to invest and is considering a franchise for a fast-food outlet. he would

  An investor in the otc market is long

An investor in the OTC market is long an at-the-money put and short an at-the-moneycall on Google as of the close on Sep 17, 2015. Draw the payoff diagrams of the options, and briefly explain the investor's net position.

  Fr this project you will analyze a business case and make

for this project you will analyze a business case and make recommendations based on the outcome of your analysis. the

  Find the amount of interest earned in the fifth year

Assume that delta t = 1/[10(1 + t)^2] and A(0) = 100. Find the amount of interest earned in the fifth year.

  Define your business products or services and customers by

explain the importance of a free gym businessrsquos vision mission and values in determining your strategic direction.

  Investment banks as source of liquidity

Repurchase agreements are used by investment banks as source of liquidity. A bank that wants to borrow funds sells assets to a lender promising to buy the assts back. The sale price is always higher than the repurchase price

  Calculate the t value for independent groups for the

calculate the t value for independent groups for the following data using the formula presented in the module. check

  How much would you be willing to pay for a 10-year ordinary

how much would you be willing to pay for a 10-year ordinary annuity if the payments are 500 per year and the rate of

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