4 6. Option pricing - Multiperiod binomial e The value of an option can be calculated sophisticated formulas that can be easily a stock price in six months is an assumption. Th market and firm-specific factors. Use the following formula to calculate the formula to calculate the value of any call option within the same time period, different call options, you can solve 2 b 9 952 SEO 20 995 2 500 1 + + EST 8 6 S T E 2S 98 E 22 UL 5 CuC[1 + (FRP/365) 05/(U) -d]) Cocu - [1 + (R/365P [1 + (TRF / 365)]36 8 & on + + ONE ROYS ele Blo99 19 Based on your understanding of the binomial option pricing model, is the following statement true or false? binom OLTE true al 2 8 17, and Id, sometimes called primitive secur depend on the stock process factors u 23 80 SA value of an option but and the number of 29 5 13 True False You have the following information about Learn More Inc.'s stock and a two-month call option with a strike price of $115.20. Learn More Inc.'s current stock price is $96.00. You are using the multiperiod binomial option pricing model to find the value of the two-month option with two periods. To and la values given here apply to any period. Data Collected for Learn More Inc. 1.3134 0.5358 0.1231 0.2143 You work with a junior analyst to calculate the value of the option, and she submits her Inferences to you. Which of the following points are true in the case of Learn More Inc.'s stock options? Check all that apply. The value of the one month call option with a strike price of $115.20 at the end of one month will be $1.34 The value of the call option will always remain $1.34, irrespective of the time until expiration Learn More Inc.'s stock price after one month likely will be $51.44 if the stock goes down by a factor of 0.5358 The option payoff if the stock goes down in one month will be 50.00 4 6. Option pricing - Multiperiod binomial e The value of an option can be calculated sophisticated formulas that can be easily a stock price in six months is an assumption. Th market and firm-specific factors. Use the following formula to calculate the formula to calculate the value of any call option within the same time period, different call options, you can solve 2 b 9 952 SEO 20 995 2 500 1 + + EST 8 6 S T E 2S 98 E 22 UL 5 CuC[1 + (FRP/365) 05/(U) -d]) Cocu - [1 + (R/365P [1 + (TRF / 365)]36 8 & on + + ONE ROYS ele Blo99 19 Based on your understanding of the binomial option pricing model, is the following statement true or false? binom OLTE true al 2 8 17, and Id, sometimes called primitive secur depend on the stock process factors u 23 80 SA value of an option but and the number of 29 5 13 True False You have the following information about Learn More Inc.'s stock and a two-month call option with a strike price of $115.20. Learn More Inc.'s current stock price is $96.00. You are using the multiperiod binomial option pricing model to find the value of the two-month option with two periods. To and la values given here apply to any period. Data Collected for Learn More Inc. 1.3134 0.5358 0.1231 0.2143 You work with a junior analyst to calculate the value of the option, and she submits her Inferences to you. Which of the following points are true in the case of Learn More Inc.'s stock options? Check all that apply. The value of the one month call option with a strike price of $115.20 at the end of one month will be $1.34 The value of the call option will always remain $1.34, irrespective of the time until expiration Learn More Inc.'s stock price after one month likely will be $51.44 if the stock goes down by a factor of 0.5358 The option payoff if the stock goes down in one month will be 50.00