Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. what is the premium for a call option on a stock w

What is the premium for a call option on a stock with the following characteristics? Current stock...

70.2K

Verified Solution

Question

Finance

  1. What is the premium for a call option on a stock with thefollowing characteristics?

Current stock price

$70

Stock price volatility (standard deviation)

0.0693

Continuously compounded annual risk free rate

11.94%

Strike price (or exercise price)

$80

Time to expiration (in years)

9 months

What is the option premium if thisoption is a European put and the stock will pay a dividend of $3 insix months?

Answer & Explanation Solved by verified expert
4.0 Ratings (812 Votes)
SolutionWe will use BlackScholes formula for calculation of call optionand put    See Answer
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!
Become a Member

Other questions asked by students

Q

A tank contains 100 gal of water. Brine enters the tank at the rate of 3 gal/min....

Basic Math
Q

1.Read the mini-medical-record of the patient’s encounter, then abstract, assign, and sequence ICD-10-CM diagnosis codes and...

Medical Sciences
Q

PLEASE SOLVE IT :) What is the mean of the term perceived partner responsiveness ? According to...

Psychology
Q

Hellier Contractors paints interiors of residences and commercial structures. The firm's management has established cost standards per...

Accounting
Q

The Genetic core of the Coronavirus is RNA The virus enters a human host cell...

Biology
Q

Mustard gas removes guanine (G) from DNA. For developing embryos, exposure to mustard gas can...

Biology
Q

A small orifice or area a is at the bottom of a tube or cross...

Physics
Q

A pendulum bob of mass m carrying a charge is at rest with its string...

Physics
Q

A person going to a party was asked to bring 5 different bags of chips...

Statistics
Q

In addition, the four basic financial statements areas: the income statement, balance sheet, statement of...

Accounting
Q

Question 11 2 pts Cincinnati Gearing System issued 6%...

Accounting
Q

PHN Foods granted 24 million of its no par common shares to executives, subject to...

Accounting