FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

IBM stock currently sells for 49 dollars per share. Over 12 months the price will either go by 11.5 percent or down by -7.0 percent.

IBM stock currently sells for 49 dollars per share. Over 12 months the price will either go by 11.5 percent or down by -7.0 percent. The risk-free rate of interest is 4.5 percent continuously compounded. What is the value of a put option with strike price 51 and maturity 12 months?

Group of answer choices

A. 1.1797

B. 1.9353

C. 0.62718

D. 3.2557

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Forward Lease Sukuk In Islamic Capital Markets Structure And Governing Rules

Forward Lease Sukuk In Islamic Capital Markets Structure And Governing Rules

Authors: Ahcene Lahsasna , M. Kabir Hassan , Rubi Ahmad

1st Edition

3319942611,331994262X

More Books

Students also viewed these Finance questions

Question

★★★★★
What are some of the uses of determinants?

Answered: 1 week ago

Question

★★★★★
Rocky and Bullwinkle Partnership sold a parcel of land during the current year and realized a gain of $250,000. Rocky and Bullwinkle did not recognize gain related to the sale of the land on its tax...

Answered: 1 week ago

Question

★★★★★
Establishing the Overall Program Goal: A Practical Perspective

Answered: 1 week ago

Question

★★★★★
For 2012, Selene Company initiated a sales promotion campaign that included the expenditure of an additional $25,000 for advertising. At the end of the year, Scott Brown, the president, is presented...

Answered: 1 week ago

Question

★★★★★
Subject: Technical and Business Writing NOTE: The Document MUST be of 3 to 4 pages and it must be in the soft form or type. . Q. 2. Suppose you are the General Manager of a software firm. Prepare an...

Answered: 1 week ago

Question

★★★★★
intervention involves attracting good people, setting goals, and appraising and rewarding performance. Strategic Technostructural Marketing O Tactical O Human resource management

Answered: 1 week ago

Question

★★★★★
1. Weekly Net Claim Cash Gross Gross Pen Salary Tax Ben Ins Em Fed Prov Allow Pay Inc Ems a. 1 1 $ 450.00 $20.00 $ 10.00 b. 3 3 $525.00 $ 40.00 $ 5.50 C. 5 5 $575.00 $ 50.00 $ 20.00 d. 7 8 $ 600.00 $...

Answered: 1 week ago

Question

★★★★★
Bowser Inc. manufactures two models of speakers, Rumble and Thunder. Based on the following production and sales data for June, prepare (a) a sales budget and (b) a production budget: Estimated...

Answered: 1 week ago

Question

★★★★★
Values for dimensions on the figure are given in the following table. Note the figure may not be to scale. Variable Value Variable Value 10 in h1 8.5 in W1 h2 18.2 in 6.9 in W2 12.2 in h3 17.3 in W3...

Answered: 1 week ago

Question

★★★★★
Milungu Plc is a manufacturing company listed on the Lusaka stock Exchange ( LUSE ) . The company; which has been trading for many years, prepares accounts to 3 1 st December each year. During the...

Answered: 1 week ago

Question

★★★★★
Two blocks are attached by a rope to a wall. A child pulls horizontally on a second rope attached to each block. Both blocks remain at rest on the frictionless surface. The weights of the blocks and...

Answered: 1 week ago

Previous Question Next Question