Stock price today at 200. Call strike is 160. Stock price in 1 year follows uniform distribution. a. if MAD is 50, how much should the call be priced at? b. if 160 PUT is priced at $5, what is the implied MAD?

Algebra & Trigonometry with Analytic Geometry
13th Edition
ISBN:9781133382119
Author:Swokowski
Publisher:Swokowski
Chapter10: Sequences, Series, And Probability
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Stock price today at 200. Call strike is 160. Stock price in 1 year follows uniform distribution.

a. if MAD is 50, how much should the call be priced at?

b. if 160 PUT is priced at $5, what is the implied MAD?

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