Use the BlackScholes model for pricing a call, putcall parity, and the previous question to show that
Question:
Use the Black–Scholes model for pricing a call, put–call parity, and the previous question to show that the Black–Scholes model for directly pricing a put can be written as follows:
P = E × e−Rt × N(−d2) − S × N(−d1)
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 72% (11 reviews)
From putcall parity P E e Rt C S Substituting the BlackScho...View the full answer
Answered By
Somshukla Chakraborty
I have a teaching experience of more than 4 years by now in diverse subjects like History,Geography,Political Science,Sociology,Business Enterprise,Economics,Environmental Management etc.I teach students from classes 9-12 and undergraduate students.I boards I handle are IB,IGCSE, state boards,ICSE, CBSE.I am passionate about teaching.Full satisfaction of the students is my main goal.
I have completed my graduation and master's in history from Jadavpur University Kolkata,India in 2012 and I have completed my B.Ed from the same University in 2013. I have taught in a reputed school of Kolkata (subjects-History,Geography,Civics,Political Science) from 2014-2016.I worked as a guest lecturer of history in a college of Kolkata for 2 years teaching students of 1st ,2nd and 3rd year. I taught Ancient and Modern Indian history there.I have taught in another school in Mohali,Punjab teaching students from classes 9-12.Presently I am working as an online tutor with concept tutors,Bangalore,India(Carve Niche Pvt.Ltd.) for the last 1year and also have been appointed as an online history tutor by Course Hero(California,U.S) and Vidyalai.com(Chennai,India).
4.00+
2+ Reviews
10+ Question Solved
Related Book For
Corporate Finance
ISBN: 978-0077861759
10th edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
Question Posted:
Students also viewed these Corporate Finance questions
-
A one-sided confidence interval for p can be written as p < + E or p > - E, where the margin of error E is modified by replacing z/2 with z. If Air Borealis wants to report an on-time performance of...
-
The interval (2, 5) can be written as the inequality _________.
-
The number 0.999c can be written as the sum of the terms of an infinite geometric sequence: 0.9 + 0.09 + 0.009 + . Here we have a 1 = 0.9 and r = 0.1. Use the formula for S to find this sum. Does...
-
Given an \(n\)-by- \(n\) subarray of black (1) and white (0) pixels, design a linear-time algorithm that finds the largest square subarray that contains no white pixels. In the following example, the...
-
Casement Ltd makes windows with two types of frame: plastic and mahogany. Products using the two types of materials are made in separate premises under the supervision of separate production...
-
A population distribution has a mean of 10 and a variance of 16 . Determine the mean and variance of \(\bar{Y}\) from an i.i.d. sample from this population for (a) \(n=10\); (b) \(n=100\); (c)...
-
Two people differ in age by 1.5 years. Their heights and weights are the same, and their lung capacities are measured at the same pressure and temperature. By how much should we predict their lung...
-
Minott Jewelers, Ltd., purchased store fixtures, display cases, and a maximum-security commercial safe for a lump-sum price of $14,000 from a bankrupt competitor. Appraised values were as follows:...
-
Please create a rule statement that addresses personal jurisdiction,Please do not edit the structure of the sentences, but place them in the order (bluebook Short Form) (4) Ross Holding & Management...
-
Selected year-end account balances before adjustments for Caldwell Realty at December 31, 2022 are shown below. Data needed for year-end adjustments are as follows. a. Unearned revenues at December...
-
Brozik Corp. has a zero coupon bond that matures in five years with a face value of $60,000. The current value of the companys assets is $57,000, and the standard deviation of its return on assets is...
-
A stock is currently priced at $50. The stock will never pay a dividend. The risk-free rate is 12 percent per year, compounded continuously, and the standard deviation of the stocks return is 60...
-
Nicoles Getaway Spa (NGS) has been so successful that Nicole has decided to expand her spa by selling merchandise. She sells things such as nail polish, at-home spa kits, cosmetics, and aroma-therapy...
-
A 10 year bond with 12.5% coupon rate and $1000 face value. YTM is 14.5%. Assuming annual coupon payment, Calculate the price of the bond
-
Next is to further explore the variables that are really contributing to the energy production from 2014 to 2022. To be able to do that, we define the following variables. Y variable: total_energy =...
-
ExplainCapital Structure and give an example.Define Capital Structure and give an example.
-
A 0.5-m 3 rigid tank contains air initially at 1000 kPa and 22C. Air at 2000 kPa and 22C is slowly added until the pressure reaches 1500 kPa. Assume that the temperature in the tank does not change...
-
Problem 6 - Health Insurance Consider an insurance market with two kinds of individuals x {,} where x is the individual's expected health cost. We will also refer to x as an individual's health...
-
Initial margin for a futures contract is usually: a. Regulated by the Federal Reserve. b. Less than 2 percent of contract value. c. In the range between 2 percent and 5 percent of contract value. d....
-
Use of the contraceptive Depo Provera appears to triple women's risk of infection with chlamydia and gonorrhea , a study reports today. An estimated 20 million to 30 million women worldwide use Depo...
-
Use the defining integral to find the Fourier transform of \(f(t)=A[u(t+1)-u(t-2)]\).
-
Neon Lights Company is a private company with sales of $1.3 million a year. Management wants to go public but has to wait until the sales reach $2 million. If sales are expected to grow 12 percent...
-
You have just inherited $550,000. You plan to save this money and continue to live off the money that you are earning in your current job. If the $550,000 is everything that you have other than an...
-
Xenix Corp had sales of $353,866 in 2011. If management expects its sales to be $476,450 in three years, what is the rate at which the companys sales are expected to grow?
-
a. In nucleotide-based alignment, one algorithm to update scores in comparing two nucleotide sequences is shown below (8 is gap penalty; vi and wj are two nucleotides being compared; u is a...
-
How many times does the following loop execute? for(x = 1000; x <10; x--) { code here... }
-
a) Write an assembly program to implement the following instructions. HINT: YOU CAN USE REGISTERS FOR STORING INTERMEDIATE INFORMATION IF NEEDED. EAX, EBX, ECX, EDX, ESI, EDI REGISTERS ARE AVAILABLE....
Study smarter with the SolutionInn App