A, B, C, D

Homework: Ch 21B HW, Valuing Options, 325 Save Score: 0 of 3 pts 6 of 6 (1 complete) HW Score: 0%, 0 of 15 p Question Help P21-20 (similar to) Harbin Manufacturing has 10 million shares outstanding with a current share price of $21.13 per share. In one year, the share price is equally likely to be $29 or $18. The risk-free interest rate is 6% a. Using the risk-neutral probabilities, what is the value of a one-year call option on Harbin stock with a strike price of $25? b. What is the expected return of the call option? c. Using the risk-neutral probabilities, what is the value of a one-year put option on Harbin stock with a strike price of $257 d. What is the expected return of the put option? a. Using the risk-neutral probabilities, what is the value of a one-year call option on Harbin stock with a strike price of $25? The value of the one-year call option is $117. (Round to the nearest cent.) Enter your answer in the answer box and then click Check Answer Final Chick Clear All parts remaining A 09 23 Homework: Ch 21B HW, Valuing Options, 325 Save Score: 0 of 3 pts 6 of 6 (1 complete) HW Score: 0%, 0 of 15 p Question Help P21-20 (similar to) Harbin Manufacturing has 10 million shares outstanding with a current share price of $21.13 per share. In one year, the share price is equally likely to be $29 or $18. The risk-free interest rate is 6% a. Using the risk-neutral probabilities, what is the value of a one-year call option on Harbin stock with a strike price of $25? b. What is the expected return of the call option? c. Using the risk-neutral probabilities, what is the value of a one-year put option on Harbin stock with a strike price of $257 d. What is the expected return of the put option? a. Using the risk-neutral probabilities, what is the value of a one-year call option on Harbin stock with a strike price of $25? The value of the one-year call option is $117. (Round to the nearest cent.) Enter your answer in the answer box and then click Check Answer Final Chick Clear All parts remaining A 09 23