A stock is currently trading at \\( \\$ 42.00 \\). In one period, it will...
60.1K
Verified Solution
Link Copied!
Question
Finance
A stock is currently trading at \\( \\$ 42.00 \\). In one period, it will either be worth \\( \\$ 51.00 \\) or \\( \\$ 33.00 \\). No other prices for the stock are possible. A risk free asset worth \\( \\$ 1 \\) currently will be worth \\( \\$ 1.013 \\) in one period. What is the price of a European CALL option that expires in one period with a strike price of \\( \\$ 46.00 \\) ? Report your answer without a dollar sign to 4 decimal places
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
A stock is currently trading at \\( \\$ 42.00 \\). In one period, it will either be worth \\( \\$ 51.00 \\) or \\( \\$ 33.00 \\). No other prices for the stock are possible. A risk free asset worth \\( \\$ 1 \\) currently will be worth \\( \\$ 1.013 \\) in one period. What is the price of a European CALL option that expires in one period with a strike price of \\( \\$ 46.00 \\) ? Report your answer without a dollar sign to 4 decimal places 