Question
Question1:Consider a stock with spot price of $200 that can increase or decrease by 10% each month. Find the price of 2-month European call option
Question1:Consider a stock with spot price of $200 that can increase or decrease by 10% each month. Find the price of 2-month European call option with strike price of $190. The stock does not pay any dividends. The risk-free interest rate is 8%
Question2:Consider 2-year futures contract on a stock. Todays futures price is $200 and next year it can increase by 20% or decrease by 30%. Find the price of 1-year European call futures options with strike price of $190 on this futures contract. The stock does not pay any dividends. The risk-free interest rate is 8%
Question3:Todays exchange rate is 1.5$/ and next year it can either go up to 1.6$/ or down to 1.4$/. Find the price of 1-year European call option on 1000 with strike price of 1.45$/ if S.S. interest rate is 8% and U.K. interest rate is 3%
Thanks!
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started