Question
A call option has a strike price of $529.1 million. The stock is currently $520. In one year there are two possible outcomes $616 or
A call option has a strike price of $529.1 million. The stock is currently $520. In one year there are two possible outcomes $616 or $440. The risk free rate is 5.97% per year. Answer in % round to two decimals.
What is the percentage increase in the up solution?
What is the risk free neutral probability of the up movement of the investment?
What is the value of a call today?
Use the put call parity condition to find the value of a put with the same strike price and maturity.
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Intermediate Microeconomics
Authors: Hal R. Varian
9th edition
978-0393123968
