The 1-year $42 options on Lowell Star stock are priced at $1.43 for the call and $.57 for the put. The annual risk-free rate is 3.5 percent. What is the per share price of the underlying stock? $45.73 $41.44 $38.42 $35.09 $32.74
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The 1-year $42 options on Lowell Star stock are priced at $1.43 for the call and...
The 1-year $42 options on Agrium stock are priced at $1.54 for the call and $0.97 for the put. The annual risk-free rate is 3 percent. What is the per share price of the underlying stock? (Hint: use the put-call parity to determine the share price) $41.35 $43.19 $45.27 $47.64 $49.13
The 1-year $51 options on Nest stock are priced at $1.49 for the call and $1.27 for the put. The annual risk-free rate is 3 percent. What is the per share price of the underlying stock? (Hint: use the put-call parity to determine the share price) $51.00 $50.25 $50.67 $48.86 $49.73
Webster United stock is priced at $35.79 per share. The 6-month $35 call options are priced at $1.40 and the risk-free rate is 3.2 percent, compounded continuously. What is the per share value of the 6-month put option?
8. The five factors affecting prices of call and put options Both call and put options are affected by the following five factors: the exercise price, the underlying stock price, the time to expiration, the stock’s standard deviation, and the risk-free rate. However, the direction of the effects on call and put options could be different. Use the following table to identify whether each statement describes put options or call options: Statement Put Option Call Option 1. An increase in...
Evaluate and compute call and put options price for Star Ltd with reference to Black Scholes’ option pricing model, with a dividend payout of $ 2 in 30 days Star Ltd stock price = $ 60.25 Exercise price = $ 50 Risk free rate = 5.24% Call maturity = 270 days Stock volatility = 0.45
Q29) The common stock of WIN is currently priced at $52.50 a share. One year from now, the stock price is expected to be either $54 or $60 a share. The risk-free rate of return is 4 percent. What is the per share value of one call option on WIN stock with an exercise price of $55? $.51 $.45 $.48 $.39 $.41
The following prices are available for call and put options on a stock priced at $50. The risk-free rate is 6 percent and the volatility is 0.35. The March options have 90 days remaining and the June options have 180 days remaining. The Black-Scholes model was used to obtain the prices. Calls Puts Strike March June March June 45 6.84 8.41 1.18 2.09 50 3.82 5.58 3.08 4.13 55 1.89 3.54 6.08 6.93 Use this information to answer questions 1...
10 Answer the following a. Suppose data are collected for a certain stock: Stock price Call price (1-year expiration, E $105) Put price (1-year expiration, E 105) $110 $17 $5 5% per year Risk-free interest rate Is there a mispricing of the call and put? If yes, can you exploit this mispricing to create arbitrage proft? b. Design a portfolio using only call options and the underlying stock with the following payoff at expiration: 0 10 20 30 40 S0...
A call and put expire in 0.41 year and have an exercise price of $100. The underlying stock is worth $90 and has a standard deviation of 0.25. The annual risk-free rate is 11 percent. The annual dividend yield (q) on the stock is 2%. The put option price from the three-period binomial model is:
A call and put expire in 0.41 year and have an exercise price of $100. The underlying stock is worth $90 and has a standard deviation of 0.25. The annual risk-free rate is 11 percent. The annual dividend yield (q) on the stock is 2%. The put option price from the three-period binomial model is: 8.67 9.467 9.207 7.593