. Assume that a stock price is currently at S = $40. It is known...
60.1K
Verified Solution
Link Copied!
Question
Finance
. Assume that a stock price is currently at S = $40. It is known that in one year stock price will be either $50 or $30. The annual interest rate is rf = 5%. Using a one-period risk neutral valuation method, what is the fair price of a European call option with strike price X = 45 and 1 year to maturity? A. 2.50 B. 1.50 C. 2.65 D. 2.86 E. 2.95
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!
