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- A put option has a strike price of MYR3.00/SGD. If the option is exercised before maturity, what price in the followings would maximize gain? a. MYR3.00/SGD. b. MYR2.90/SGD. c. MYR3.05/SGD. d. MYR2.95/SGD.Topic: Option Pricing When computing, please do not round off. Only final answers must be rounded off to two decimal places Based on the Black-Scholes model, the price of a put option should be P2,800. If the underlying asset has a strike price of P60,000 and a market price of P58,500, how much is the extrinsic value of the option?Using the attached option pricing model and related data K = 45; St = 40 t = 4/12; r =03; SD/σ = 0.4; N = 0.07, calculate the value of the call option
- Put together a Black–Scholes option calculator in Excel to answer the following.(a) What is the call-option value withS0 = $45, K = $48, r = 6%, T = 15 months,and volatility = 40%?(b) What is the put-option value withS0 = $60, K = $65, r = 6%, T = 18 months,and volatility = 20%?(c) What is the put-option value withS0 = $38, K = $40, r = 6%, T = 3 months,and volatility = 60%?(d) What is the call-option value withS0 = $100, K = $95, r = 8%, T = 3 years,and volatility = 40%?In the context of single period binomial option pricing model with p*d = 0.75 and rf = 0.25 the values of the state price must be equal to A. PV$1u = $0.20 and PV$1d =$0.60 B. PV$1u = $ 0.25 and PV$1d = $0.50 C. PV$1u = $0.20 and PV$1d = $0.50 D. PV$1u = $0.60 and PV$1d =$0.20Consider a one-period binomial model in which the underlying is at 65 and can go up 30% and down 22%. The risk-free rate is 8%. The price of the call option with exercise prices of 70 would be: a. 84.50 b. 0.5769 c. 0 d. 7.75 Refer to Problem #1. Suppose that the call is selling for 9 in the market and assume that we would execute an arbitrage transaction, the rate of return on a 10,000 call option would be: a. 16.20% b. 18.19% c. 15.17% d. 16.78%
- use binomial option pricing model for this question. suppose the current spot rate for USD/CHF is 0.7. you need to find the one-year call option price of USD/CHF with the exercise price of 0.68 USD/CHF. Assume that our future states will be either 0.7739 U&SD/CHF or 0.6332 USD/CHF. 1) What are the payoffs of a call option (for both states) 2) what is the hedge ratio of the call option?With all other variables being equal (the same excerise price, underlying asset, implied volatility, interest rate, etc.), an at-the-money option with 30 days to expiration will tpyically have a gamma that is higher than an at-the-moeny option with 180 days to expiration (hint: think of the different shapes of the associated probability distribution and the change in delta) True or False?Assume the following inputs for a call option: (1) current stock price is $25, (2) strike price is $28, (3) time to expiration is 4 months, (4) annualized risk-free rate is 5%, and (5) variance of stock return is 0.33. Use the Black-Scholes model to find the price for the call option. Do not round intermediate calculations. Round your answer to the nearest cent.
- Use the Black-Scholes model to find the price for a call option with the following inputs: (1) current stock price is $32, (2) strike price is $37, (3) time to expiration is 3 months, (4) annualized risk-free rate is 6%, and (5) variance of stock return is 0.25. Do not round intermediate calculations. Round your answer to the nearest cent.A European call option has a strike price of K and maturity of T. If the stock price at the maturity is ST, what is the payoff from a short position in this call option (without considering the option price)? Group of answer choices: Max(K - ST, 0) -Max(ST - K, 0) -Max(K - ST, 0) Max(ST - K, 0)if the volatility was reduced to 10.500% when the spot rate fell to $1.2483=€1.00 ? The same call option cost if the volatility was reduced to 10.500% when the spot rate foll $1.2483=€1.00 would be ◻ Data table
