ABC Company's current stock price is $100. The risk-free rate is 4%. 38. The payoff to the holder of a call option on ABC with an exercise price of $200 is closest to: A. $100 if stock price at option expiration equals $200 B. Zero if stock price at option expiration equals $100 C. -$40 if stock price at option expiration equals $160
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- Put–Call Parity The current price of a stock is $33, and the annual risk-free rate is 6%. A call option with a strike price of $32 and with 1 year until expiration has a current value of $6.56. What is the value of a put option written on the stock with the same exercise price and expiration date as the call option?Shopify, Inc common stock currently sells for $1,229.91 per share, and the standard deviation of returns is 58.67%. A call option with a strike price of $1,100 is currently trading on the market. The option expires in 0.15 years, and the risk-free rate of return is 0.9%. Shopify does not pay a dividend. What is rho (ρ) for this call option assuming a continuous model such as the Black-Scholes model? A) 104.1327 B) 107.2895 C) 57.7772 D) 107.0002A non – dividend – paying stock with a current price of $52, the strike price is $50, the risk free interest rate is 12% pa, the volatility is 30% pa, and the time to maturity is 3 months? a) Calculate the price of a call option on this stock b) What is the price of a put option price on this stock? c) Is the put-call parity of these options hold?
- DEP stock is currently at $100 and it is expected to either go up or down by 10%. A call option was written with an exercise price of $105. The risk free rate is 4.5%. The intrinsic value of the stock would be? YUP stock is currently at $50 and it is expected to either go up or down by 15%. The expected price of the stock after one period is exercise price of $54. The risk free rate is 5%. The intrinsic value of the stock would be? RID Corporation announced a net income of $2 million after deducting all expenses that includes non-cash expenses and interest expense amounting to $400,000 and $250,000 respectively. The tax rate is 30%. The balance sheet shows an increase in current assets (except cash) amounting to $300,000 and an increase in current liabilities (except loans) amounting to $400,000. The firm had also acquired long-term asset amounting to $600,000. The FCFF of the firm would be? Use #3. The firm expects that the FCFF will grow by 6% continuously. The firm’s WACC is 15%.…You are attempting to value a call option with an exercise price of $140 and one year to expiration. The underlying stock pays no dividends, its current price is $140, and you believe it has a 50% chance of increasing to $160 and a 50% chance of decreasing to $120. The risk-free rate of interest is 10%. Consider one share of stock and two written calls. Calculate the call option's value using the two-state stock price model. (Do not round intermediate calculations. Round your answer to 2 decimal places.)For each of the 100-share options shown in the following table below; use the underlying stock price at expiration and other information to determine the amount of profit or loss an investor would have had. Option Type of option Cost of option Strike price per share Underlying stock price per share at expiration A Call $214 $48 $53 B Call $372 $45 $48 C Put $537 $63 $54 D Put $297 $32 $36 E Call $495 $27 $24 The profit (loss) experienced on option A is $ ? (Round to the nearest dollar. Enter a negative number for loss.)
- The Moon company currently sells for 100 $. The annual stock price volatility is %10 and risk- free interest rate %8, the price of a call on a company’s stock with strike price 200 $ and time period 2 months. Find the stock option price with Black and Scholes Model. If option market value 320 $ what is the option strategy?A collar is established by buying a share for 50, buying a 6-month put option with exercise price 45, and writing a call option with exercise price 55. On the basis of the volatility of the stock, you calculate that at a strike price of 45 and expiration of 6 months, N(d1) =0.6 whereas for the exercise price of 55, N(d1) = 0.35 What will be the gain or loss on the collar if the stock price increases by 1? What happens to the delta of the portfolio if the stock price becomes very large?The current market price for common shares of ABC Company is $25. Call options on these shares currently trade at 1.50, and come with an $30 exercise price. If the stock’s market price rose to $35 what would be the dollar payoff? your answer should like this: 4.00 that is not the right answer
- The current price of a stock is $33, and the annual risk-free rate is 4%. A call option with a strike price of $32 and with 1 year until expiration has a current value of $6.52. What is the value of a put option written on the stock with the same exercise price and expiration date as the call option? Do not round intermediate calculations. Round your answer to the nearest cent.The Black-Scholes model is used by Bulldogs Inc. to value call options on the stock of National Inc. The following information was determined by the analyst: · The share price is P30. · The price of the option is at P32. · The risk-free rate is 3%. · The option matures in 6 months In the formula of the current value of the call option under the Black-Scholes model, what is the exponent of “e” be? a. 0.25 b. -0.055 c. -0.015 d. 0.15Carmax, Inc. common stock currently sells for $95.89 per share, and the standard deviation of returns is 44.58%. A call option with a strike price of $95.00 is currently trading on the market. The option expires in three months, and the risk - free rate of return is 4.4%. Carmax does not pay a dividend. Carmax's gamma (\Gamma) is: Group of answer choices 0.01829 0.00528 0.01723 0.01866