Assume the risk-free rate is 3% and will remain so for all time. Facebook (FB) currently...
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Assume the risk-free rate is 3% and will remain so for all time. Facebook (FB) currently trades at $120. You purchase a 1-year European $5-strike call options on a short futures contract one share of FB. The futures delivery date is 2.5 years from now and the delivery price is $130. Compute the range of price of FB in one year from now that will make you want to exercise your option.
Can someone please help, thank you!
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Assume the risk-free rate is 3% and will remain so for all time.
Facebook (FB) currently...
(11 Suppose that Facebook stock is currently priced at $170 per share and you have bought...
(11 Suppose that Facebook stock is currently priced at $170 per share and you have bought a put option with the strike price at $150 per share. The option premium is $10. The intrinsic value of your option is A) -$10. B) $0. C) $10. D) $20. One share of General Electric stock is priced at $10 today. Both options below are on General Electric stock and expire in 3 months. Option A Option B Type Call option Put option...
Assume the Black-Scholes framework for options pricing. You are a portfolio manager and already have a...
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1. (Put-call parity) A stock currently costs So per share. In each time period, the value...
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1. (Put-call parity) A stock currently costs So per share. In each time period, the value...
1. (Put-call parity) A stock currently costs So per share. In each time period, the value of the stock will either increase or decrease by u and d respectively, and the risk-free interest rate is r. Let Sn be the price of the stock at t-n, for O < n < N, and consider three derivatives which expire at t - V, a cal option Voll-(SN-K)+, a put option VNut-(X-Sy)+, and a forward option VN(SN contract FN SN N) ,...
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A) The spot price of the British pound is currently $2.00. If the risk-free interest rate...
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A stock is currently priced at $75.00. The risk free rate is 4.5% per annum with continuous compounding. Use a one-time...
A stock is currently priced at $75.00. The risk free rate is 4.5% per annum with continuous compounding. Use a one-time step Cox-Ross-Rubenstein model for the price of the stock in 13 months assuming the stock has annual volatility of 24.9%. Compute the price of a 13 month call option on the stock with strike $80.00.
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(11 Suppose that Facebook stock is currently priced at $170 per share and you have bought a put option with the strike price at $150 per share. The option premium is $10. The intrinsic value of your option is A) -$10. B) $0. C) $10. D) $20. One share of General Electric stock is priced at $10 today. Both options below are on General Electric stock and expire in 3 months. Option A Option B Type Call option Put option...
Assume the Black-Scholes framework for options pricing. You are a portfolio manager and already have a long position in Apple (ticker: AAPL). You want to protect your long position against losses and decide to buy a European put option on AAPL with a strike price of $180.15 and an expiration date of 1-year from today. The continuously compounded risk free interest rate is 8% and the stock pays no dividends. The current stock price for AAPL is $200 and its...
1. (Put-call parity) A stock currently costs So per share. In each time period, the value of the stock will either increase or decrease by u and d respectively, and the risk-free interest rate is r. Let Sn be the price of the stock at t n, for O < n < V, and consider three derivatives which expire at t- N, a call option Vall-(SN-K)+, a put option Vpul-(K-Sy)+, ad a forward contract Fv -SN -K (a) The forward...
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