The price of a non-dividend-paying stock is $50 and the price of a 4-month European call option on the stock with a strike price of $50 is $3. The risk-free rate is 4% perannum. What is the price of a 4-month European put option with same strike price?Pt = 3.3378Pt = 2.3378O None of the above.O Pt = 1.3378

Spot Price is $50 Expiry Period is 4 month Risk free rate is 4%per annum. 4-month European call…

The price of a non-dividend-paying stock is $50 and the price of a 4-month European call option on the stock with a strike price of $50 is $3. The risk-free rate is 4% p annum. What is the price of a 4-month European put option with same strike price? O pt = 3.3378 O pt = 2.3378 O None of the above. O pt = 1.3378

The price of a non-dividend-paying stock is $50 and the price of a 4-month European call option on the stock with a strike price of $50 is $3. The risk-free rate is 4% p annum. What is the price of a 4-month European put option with same strike price? O pt = 3.3378 O pt = 2.3378 O None of the above. O pt = 1.3378

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter5: Financial Options

Section: Chapter Questions

Problem 4P: Put–Call Parity The current price of a stock is $33, and the annual risk-free rate is 6%. A call...

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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?
The current price of a non - dividend paying stock is $617 and the annual standard deviation of the rate of return on the stock is 32%. A European call option on the stock expires in 0.5 years. Its strike price is $630. The risk - free rate is 2% (continuously compounded) What should be the price (premium) of the call option?
Suppose a non-dividend paying stock is trading at $175 per share and has a volatility of 20%. What is the fair price of a 3-month European call option with a strike price of $190 per share using 1 binomial period? Assume the risk-free rate is 1%. Round to the nearest $0.01.
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Suppose a non-dividend paying stock is trading at $175 per share and has a volatility of 45%. What is the fair price of a 9-month European put option with a strike price of $190 per share using 1 binomial period? Assume the risk-free rate is 1%. Round to the nearest $0.01.
Give typing answer with explanation and conclusion What is the lower bound for the price of a 7-month European call option on a non-dividend-paying stock when the stock price is $44.02, the strike price is $39, and the risk-free interest rate is 1.3% per annum? Report your answer in dollars and cents.
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