The stock of Al-Maha Company is expected to have the following probability distributions with respect to market price per share 6 months hence? Option exists with an exercise price of $38 and expiration date 6 months from now. What is the expected value of market price? What is the expected value of option price at expiration? Probability Share price . 20 65 35 70 25 78 20 85 Select one: a. None of the other three answers are correct b. Expected value of option price=$46 c. Expected value of option price=$36 d. Expected value of option price=$26
The stock of Al-Maha Company is expected to have the following probability distributions with respect to market price per share 6 months hence? Option exists with an exercise price of $38 and expiration date 6 months from now. What is the expected value of market price? What is the expected value of option price at expiration?
Probability Share price .
20 65
35 70
25 78
20 85
Select one:
a. None of the other three answers are correct
b. Expected value of option price=$46
c. Expected value of option price=$36
d. Expected value of option price=$26
Option price: It is the amount of premium that the option’s buyer has to pay to the writer of the option contract.
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