Problem 1 Intro The current price of a non-dividend-paying stock is $59.61 and you expect the stock price to either go up by a factor of 1.43 or down by a factor of 0.699 over the next 0.8 years. A European call option on the stock expires in 0.8 years. Its strike price is $60. The risk-free rate is 3% (annual, continuously compounded). Part 1 Attempt 1/10 for 10 pts. What is the option payoff if the stock price goes up? 1+ decima Submit Part 2 Attempt 1/10 for 10 pts. What is the risk-neutral probability of an up movement? 3+ decima Submit Part 3 What is the value of the option? 1+ decima Submit Attempt 1/10 for 10 pts. Problem 2 Intro The current price of a non-dividend-paying stock is $14.42 and you expect the stock price to either go up by a factor of 1.363 or down by a factor of 0.734 over the next 0.6 years. A European call option on the stock expires in 0.6 years. Its strike price is $14. The risk-free rate is 4% (annual, continuously compounded). Part 1 What is the value of the option? 2+ decima Attempt 1/10 for 10 pts. Submit Problem 3 Intro The current price of a non-dividend-paying stock is $38.81 and you expect the stock price to either go up by a factor of 1.209 or down by a factor of 0.827 over the next 0.4 years. A European put option on the stock expires in 0.4 years. Its strike price is $39. The risk-free rate is 3% (annual, continuously compounded). Part 1 What is the value of the option? 2+ decima Submit Attempt 1/10 for 10 pts. Problem 4 Intro The current price of a non-dividend-paying stock is $35.43 and you expect the stock price to either go up by a factor of 1.196 or down by a factor of 0.836 over the next 0.2 years. A European put option on the stock expires in 0.2 years. Its strike price is $35. The risk-free rate is 4% (annual, continuously compounded). Part 1 Attempt 1/10 for 10 pts. What is the option payoff if the stock price goes down? 1+ decima Submit Part 2 Attempt 1/10 for 10 pts. What is the risk-neutral probability of an up movement? 3+ decima Submit Part 3 What is the value of the option? 2+ decima Submit Attempt 1/10 for 10 pts. Problem 5 Intro The current price of a non-dividend-paying stock is $63.29 and you expect the stock price to either go up by a factor of 1.181 or down by a factor of 0.861 each period for 2 periods over the next 0.2 years. Each period is 0.1 years long. A European put option on the stock expires in 0.2 years. Its strike price is $63. The risk-free rate is 8% (annual, continuously compounded). Part 1 What is the current value of the option? 2+ decima Submit Attempt 1/10 for 10 pts.