The current price of a stock is $22, and at the end of one year
its price will be either $27 or $17. The annual risk free rate is
8.0%, based on daily compounding.
A 1-year call option on the stock with an exercise price of $22 is
available. Based on the binomial model what is the option's
value?
a. $3.55
b. $3.41
c. $3.23
d. $3.15
The current price of a stock is $22, and at the end of one year its...
Binomial option pricing model A stock currently trades for $41. In one month, the price will either be $50 or $36. The annual risk-free rate is 6%; assume daily interest compounding, and 365 days per year. The value of a one-month call option with an exercise price of $39 is $______.
Binomial option pricing model A stock currently trades for $41. In one month, the price will either be $47 or $34. The annual risk-free rate is 6%; assume daily interest compounding and 365 days per year. The value of a one-month call option with an exercise price of $39 is $______.
The current price of a stock is $39.99. A one-year call option on the stock with a strike price of $38.83 has a current price of $6.02. The annual risk-free rate is 4%. Assume daily interest compounding. What is the current value of a one-year put option on the stock with the same exercise price?
Binomial Model The current price of a stock is $16. In 6 months, the price will be either $20 or $11. The annual risk-free rate is 5%. Find the price of a call option on the stock that has an strike price of $14 and that expires in 6 months. (Hint: Use daily compounding.) Round your answer to the nearest cent. Assume a 365-day year. Do not round your intermediate calculations. $
eBook Problem 8-07 Binomial Model The current price of a stock is $16. In 6 months, the price will be either $20 or $12. The annual risk-free rate is 3%. Find the price of a call option on the stock that has an strike price of $15 and that expires in 6 months. (Hint: Use daily compounding.) Round your answer to the nearest cent. Assume a 365-day year. Do not round your intermediate calculations
1) The current price of a stock is $15. In 6 months, the price will be either $18 or $13. The annual risk-free rate is 3%. Find the price of a call option on the stock that has a strike price of $14 and that expires in 6 months. (Hint: Use daily compounding.) Round your answer to the nearest cent. Assume a 365-day year. Do not round your intermediate calculations. 2) The current price of a stock is $20. In...
The current price of Estelle Corporation stock is $ 23.00. In each of the next two years, this stock price will either go up by 16 % or go down by 16 %. The stock pays no dividends. The one-year risk-free interest rate is 8.0 % and will remain constant. Using the Binomial Model, calculate the price of a one-year call option on Estelle stock with a strike price of $ 23.00. The price of the one-year call option is...
The current price of Estelle Corporation stock is $ 23.00 In each of the next two years, this stock price will either go up by 18 % or go down by 18 %. The stock pays no dividends. The one-year risk-free interest rate is 8.0 % and will remain constant. Using the Binomial Model, calculate the price of a one-year call option on Estelle stock with a strike price of $ 23.00
The current price of Estelle Corporation stock is $25. Its stock price will either go up by 20% or go down by 20% in one year. The stock pays no dividends. The one-year risk-free interest rate is 6%. Using the binomial model, calculate the price of a one-year call option on Estelle stock with a strike price of $25. The price of a one-year call option on Estelle stock with a strike price of $25 is $ (Round to the...
The Call option on the stock has a $13 exercise price and one-year maturity. The volatility of the stock is 10%. The probability of an up or down movement is an equal 50%. The risk-free interest rate is 6% per annum The current stock price is $13. Stock movement is 2 times a year. Value the premium of the option based on Binomial Model.