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Please help me solve the Risk-neutral probability and the Call Premium probability in Excel. I need the Excel formulas so please work in excel. This
Please help me solve the Risk-neutral probability and the Call Premium probability in Excel. I need the Excel formulas so please work in excel. This is legiable.
$ Ford Motors Company Current stock price (SO) Standard Dev. (Annual) 1-year risk free rate (R) Exercise price (K) Time to maturity Stock Dividend Yield (9) 19.42 0.4039 1.7% 20.00 0.2143 1.12% AT&T Inc. Current stock price (SO) Standard Dev. (Annual) 1-year risk free rate Exercise price (K) Time to maturity Stock Dividend Yield (q) 24.8 0.1817 1.7% 28.00 0.2143 8% $ $ Up factor (u) Down factor (d) 1.2056 Eq. 12.11 0.8295 Eq. 12.12 Up factor (u) Down factor (d) 1.0878 Eq. 12.11 0.9193 Eq. 12.12 Stock price in the up movement Stock price in the down movement Call option payoff in the up movement (fu) Call option payoff in the down movement (fd) 23.4125 SO*u 16.1083 SO*d 3.4125 Max(0, SO*u-K) 0 Max(0, SO*d-K) Stock price in the up movement Stock price in the down movement Put option payoff in the up movement (fu) Put option payoff in the down movement (fd) 26.9763 SO*u 22.7993 so*d 0.0000 Max(0, K-SO*u) 0 Max(0, K-SO*d) Risk-neutral probability (p) (elr-q)At-d)/u-d Risk-neutral probability (p) Eq. 12.6 e-(r-q)At[pfu + (1 - p)f d] Call premium Put premium Eq. 12.5a $ Ford Motors Company Current stock price (SO) Standard Dev. (Annual) 1-year risk free rate (R) Exercise price (K) Time to maturity Stock Dividend Yield (9) 19.42 0.4039 1.7% 20.00 0.2143 1.12% AT&T Inc. Current stock price (SO) Standard Dev. (Annual) 1-year risk free rate Exercise price (K) Time to maturity Stock Dividend Yield (q) 24.8 0.1817 1.7% 28.00 0.2143 8% $ $ Up factor (u) Down factor (d) 1.2056 Eq. 12.11 0.8295 Eq. 12.12 Up factor (u) Down factor (d) 1.0878 Eq. 12.11 0.9193 Eq. 12.12 Stock price in the up movement Stock price in the down movement Call option payoff in the up movement (fu) Call option payoff in the down movement (fd) 23.4125 SO*u 16.1083 SO*d 3.4125 Max(0, SO*u-K) 0 Max(0, SO*d-K) Stock price in the up movement Stock price in the down movement Put option payoff in the up movement (fu) Put option payoff in the down movement (fd) 26.9763 SO*u 22.7993 so*d 0.0000 Max(0, K-SO*u) 0 Max(0, K-SO*d) Risk-neutral probability (p) (elr-q)At-d)/u-d Risk-neutral probability (p) Eq. 12.6 e-(r-q)At[pfu + (1 - p)f d] Call premium Put premium Eq. 12.5aStep by Step Solution
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