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

Question

1 Approved Answer

This is a two state option pricing question. The riskfree rate is zero. Current stock price is 9 5 . The up state stock price

This is a two state option pricing question. The riskfree rate is zero.
Current stock price is 95. The up state stock price is 117, down state 80.
A put option on this stock has a time 0 price of 8. Then the strike price of the put is
(keep 2 decimal places).
image text in transcribed

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

Step: 3

blur-text-image

Ace Your Homework with AI

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

Get Started

Students also viewed these Finance questions

Question

=+a) Interpret the slope of the line in this context.

Answered: 1 week ago

Question

★★★★★
1. What problems were Scotts Miracle Gro facing? 2. Which software was used to analyze data collected by Scotts? 3. How does a software tool such as Luminoso analyze data? 4. What are some strategic...

Answered: 1 week ago

Question

★★★★★
In its government-wide Statement of Net Position, a government reported assets of $165 million, including $50 million in capital assets (net of depreciation), and liabilities of $80 million,...

Answered: 1 week ago

Question

★★★★★
Which of the following is a false statement? Group of answer choices A boom can be stabilized/fixed by following contractionary monetary policy. An expansion/ boom can be stabilized/fixed by...

Answered: 1 week ago

Question

★★★★★
1. Ralph Abernathy owns a small coffee shop. He wants to know the average number of customers queuing (lining up) in his coffee shop, to decide whether he needs to add more space to accommodate more...

Answered: 1 week ago

Question

★★★★★
provide a brief outline of how diversity policy needs to apply to your place of work/type of business

Answered: 1 week ago

Question

★★★★★
United States dollar strengthen and weakening: Present current valuation (U.S. Dollar versus the two countries' currency) and effect on corporate profits for China vs Indonesia

Answered: 1 week ago

Question

★★★★★
. What is meant by the term cash flow? For the table below determine the yearly cash flows and the total cash flow. If a discounting rate of 8% is used what is the Net Present Value? Year 0 1 2 3 4 5...

Answered: 1 week ago

Question

★★★★★
Give two additional competencies that will be required for future project management efforts

Answered: 1 week ago

Previous Question Next Question