A call option on Jupiter Motors stock with an exercise price of $80 and one-year expiration...
A call option on Jupiter Motors stock with an exercise price of $80 and one-year expiration is selling at $7. A put option on Jupiter stock with an exercise price of $80 and one-year expiration is selling at $5.0. If the risk-free rate is 7% and Jupiter pays no dividends, what should the stock price be?
Homework Answers
As per put-call parity
PV of strike + call price = stock price + put price {both call and put strike must be same for this equation to hold}
80 / (1+7%) + 7 = stock price +5
Therefore stock price = $ 76.77
Thumbs up please if satisfied. Thanks :)
Comment for more doubts in above question
Add Answer to:
A call option on Jupiter Motors stock with an exercise price of
$80 and one-year expiration...
A call option on Jupiter Motors stock with an exercise price of $45.00 and one-year expiration...
A call option on Jupiter Motors stock with an exercise price of $45.00 and one-year expiration is selling at $8.37. A put option on Jupiter stock with an exercise price of $45.00 and one-year expiration is selling at $12.04. If the risk-free rate is 3% and Jupiter pays no dividends, what should the stock price be? (Do not round intermediate calculations. Round your answer to 2 decimal places.; Use CONTINUOUS COMPOUNDING) Stock price $
A call option with an exercise price of $70 and three months to expiration has a...
A call option with an exercise price of $70 and three months to expiration has a price of $4.10. The stock is currently priced at $69.80, and the risk-free rate is 5 percent per year, compounded continuously. What is the price of a put option with the same exercise price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Put option price $
A call option with an exercise price of $25 and four months to expiration has a...
A call option with an exercise price of $25 and four months to expiration has a price of $2.75. The stock is currently priced at $23.80, and the risk-free rate is 2.5 percent per year, compounded continuously. What is the price of a put option with the same exercise price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Put option price
You are attempting to value a put option with an exercise price of $100 and one...
You are attempting to value a put option with an exercise price of $100 and one year to expiration. The underlying stock pays no dividends, its current price is $100, and you believe it has a 50% chance of increasing to $120 and a 50% chance of decreasing to $80. The risk-free rate of interest is 10%. Calculate the value of a put option with exercise price $100.
You are attempting to value a call option with an exercise price of $100 and one...
You are attempting to value a call option with an exercise price of $100 and one year to expiration. The underlying stock pays no dividends, its current price is $100, and you believe it has a 50% chance of increasing to $124 and a 50% chance of decreasing to $76. The risk-free rate of interest is 8%. Calculate the call option's value using the two-state stock price model.
You are attempting to value a call option with an exercise price of $107 and one...
You are attempting to value a call option with an exercise price of $107 and one year to expiration. The underlying stock pays no dividends, its current price is $107, and you believe it has a 50% chance of increasing to $133 and a 50% chance of decreasing to $81. The risk-free rate of interest is 8%. Calculate the call option's value using the two-state stock price model. (Do not round intermediate calculations and round your final answer to 2...
Stock price: $48 Exercise price : 46 Time to expiration: 1 year Stock price variance: 0.40...
Stock price: $48 Exercise price : 46 Time to expiration: 1 year Stock price variance: 0.40 per year Risk-free interest rate (compounded continuously) 5% per year A) at what price should a European call option with the above characteristics sell (Note: when calculating N(d1) and N(d2). please carry your estimates out to 4 digits B) Is this call option in the money, at the money, or out of the money. C) At what price should the corresponding put option sell?
Suppose that a call option with a strike price of $48 expires in one year and...
Suppose that a call option with a strike price of $48 expires in one year and has a current market price of $5.15. The market price of the underlying stock is $46.24, and the risk-free rate is 1%. Use put-call parity to calculate the price of a put option on the same underlying stock with a strike of $48 and an expiration of one year. 1. The price of a put option on the same underlying stock with a strike...
The current price of a stock is $39.99. A one-year call option on the stock with...
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?
A one-year European call option on Stanley Industries stock with a strike price of $55 is...
A one-year European call option on Stanley Industries stock with a strike price of $55 is currently trading for $75 per share. The stock pays no dividends. A one-year European put option on the stock with a strike price of $55 is currently trading for $100. If the risk-free interest rate is 10 percent per year, then what is the current price on one share of Stanley stock assuming no arbitrage?
A call option with an exercise price of $25 and four months to expiration has a price of $2.75. The stock is currently priced at $23.80, and the risk-free rate is 2.5 percent per year, compounded continuously. What is the price of a put option with the same exercise price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Put option price
You are attempting to value a call option with an exercise price of $107 and one year to expiration. The underlying stock pays no dividends, its current price is $107, and you believe it has a 50% chance of increasing to $133 and a 50% chance of decreasing to $81. The risk-free rate of interest is 8%. Calculate the call option's value using the two-state stock price model. (Do not round intermediate calculations and round your final answer to 2...
Most questions answered within 3 hours.
-
A student takes a multiple-choice test that has 10 questions.
Each question has two choices. The...
asked 19 minutes ago -
Willie Keeler has a lifetime batting average of 0.341. Assume
that Willie Keeler came to bat...
asked 21 minutes ago -
Which of the following has the highest boiling point?
A) 0.5m NaCl
B) 0.5m C6H12O6
C)...
asked 40 minutes ago -
12. A firm is producing at an output level where
AR = MC > AC >...
asked 37 minutes ago -
Radovilsky Manufacturing Company, in Hayward, California,
makes flashing lights for toys. The company operates its production...
asked 39 minutes ago -
As an athlete exercises, sweat is produced and evaporated to
jelp maintain a proper body temperature....
asked 39 minutes ago -
Which of these macromolecules is most prevalent (by mass) in the
environment? What particular challenge does...
asked 41 minutes ago -
Consider two stocks. Stock A has a standard deviation of 46% and
stock B has a...
asked 44 minutes ago -
Give a unary language (using only input alphabet ∑={1} )that is
not Turing- recognizable and prove...
asked 55 minutes ago -
1. Write the balanced net reaction for a Ti (s) | TiCl2 (aq) ||
InCl3 (aq)...
asked 53 minutes ago -
3) Answer the following questions:please respond in one
paragraph
In your opinion, what are the crucial...
asked 59 minutes ago -
Assume that the readings at freezing on a batch of thermometers
are normally distributed with a...
asked 1 hour ago