Question

The current stock price of Nickel and Dime Corp is $64, and the stock does not...

The current stock price of Nickel and Dime Corp is $64, and the stock does not pay dividends. The risk-free rate of return is 5%. The standard deviation of the company’s stock is 20%. You want to purchase a call option on this stock with an exercise price of $55 and an expiration date 73 days from now. Using the Black-Scholes OPM, the call option should be worth ________ today. Show all steps

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The current stock price of Nickel and Dime Corp is $64, and the stock does not...
The current stock price of Nickel and Dime Corp is $64, and the stock does not pay dividends. The risk-free rate of return is 5%. The standard deviation of the company’s stock is 20%. You want to purchase a call option on this stock with an exercise price of $55 and an expiration date 73 days from now. Using the Black-Scholes OPM, the call option should be worth ________ today. Show all steps please
The current stock price of Johnson & Johnson is $70, and the stock does not pay...
The current stock price of Johnson & Johnson is $70, and the stock does not pay dividends. The instantaneous risk-free rate of return is 7%. The instantaneous standard deviation of J&J's stock is 35%. You want to purchase a put option on this stock with an exercise price of $61 and an expiration date 60 days from now. Using Black-Scholes, the put option should be worth ______ today.
The current stock price of Alcoa is $70, and the stock does not pay dividends. The...
The current stock price of Alcoa is $70, and the stock does not pay dividends. The instantaneous risk-free rate of return is 6%. The instantaneous standard deviation of Alcoa's stock is 40%. You want to purchase a put option on this stock with an exercise price of $75 and an expiration date 30 days from now. According to the Black-Scholes OPM, you should hold __________ shares of stock per 100 put options to hedge your risk. 30 34 69 74
The current stock price of Alcoa is $90, and the stock does not pay dividends. The...
The current stock price of Alcoa is $90, and the stock does not pay dividends. The instantaneous risk-free rate of return is 6%. The instantaneous standard deviation of Alcoa's stock is 30%. You want to purchase a put option on this stock with an exercise price of $95 and an expiration date 30 days from now. According to the Black-Scholes OPM, you should hold __________ shares of stock per 100 put options to hedge your risk. 31 35 70 75
Calculate the price of a European call option using the Black Scholes model and the following...
Calculate the price of a European call option using the Black Scholes model and the following data: stock price = $56.80, exercise price = $55, time to expiration = 15 days, risk-free rate = 2.5%, standard deviation = 22%, dividend yield = 8%.
The stock price of bravo corp. is curently 135$. The stock price a year from now...
The stock price of bravo corp. is curently 135$. The stock price a year from now will be either $215 or $80 with equal opportunity. The risk free rate is 3%. Using binomial OPM, the value a put option with a price of $170 and an expiration date 1 year from now should be ______ today. Answer choices: a.) 52.37 b.) $34.33 c.) 43.28 d.) $49.18
The current price of a stock is $50 and the annual risk-free rate is 6 percent....
The current price of a stock is $50 and the annual risk-free rate is 6 percent. A call option with an exercise price of $55 and one year until expiration has a current value of $7.20. What is the value of a put option (to the nearest dollar) written on the stock with the same exercise price and expiration date as the call option? (Use put-call parity)
. Assume the following for a stock and a call option written on the stock. EXERCISE...
. Assume the following for a stock and a call option written on the stock. EXERCISE PRICE = $30 CURRENT STOCK PRICE = $30 Standard Deviation = .35 (square it to find variance) TIME TO EXPIRATION = 3 MONTHS = .25 RISK FREE RATE = 4% Use the Black Scholes procedure to determine the value of the call option.   Use the Black Scholes procedure to determine the value of the Put option
Roslin Robotics stock has a volatility of 34 % and a current stock price of $56...
Roslin Robotics stock has a volatility of 34 % and a current stock price of $56 per share. Roslin pays no dividends. The​ risk-free interest is 4%. Determine the​ Black-Scholes value of a​ one-year, at-the-money call option on Roslin stock. The​ Black-Scholes value of a​ one-year, at-the-money call option on Roslin stock is $_______
XYZ Corp. will pay a $2 per share dividend in two months. Its stock price currently...
XYZ Corp. will pay a $2 per share dividend in two months. Its stock price currently is $74 per share. A call option on XYZ has an exercise price of $66 and 3-month time to expiration. The risk-free interest rate is 0.5% per month, and the stock’s volatility (standard deviation) = 13% per month. Find the Black-Scholes value of the American call option. (Hint: Try defining one “period” as a month, rather than as a year, and think about the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT