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Six month put options, struck at $16.00, on AT&T (T) are trading at $2.35. Assuming the stock is trading at $14 and interest rates are 5%, what is the price of the call with the same strike and expiry?
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- The stock of Bedrock Solutions is currently trading at $20.00 per share. The 1-month put option with strike price of 22.62 is currently selling for $4.38. What's the time value of this put option?A 6-month call option on Meyers Inc.'s stock has a strike price of $45.00 and sells in the market for $8.25. Meyers' current stock price is $51.25. What is the option premium?The stock of Bedrock Solutions is currently trading at $15.00 per share. The 1-month call option with strike price of 25.50 is currently selling for $3.14. What's the time value of this call option?
- A non-dividend-paying stock is currently priced at $16.40. The risk-free rate is 3 percent and a futures contract on the stock matures in six months. What price should the futures be?A stock is expected to pay a dividend of $1 per share in 2 months and in 5 months. The stock price is $60, and the risk-free rate of interest is 5% per annum with continuous compounding for all maturities. An investor has just taken a short position in a 6-month 1. What are the forward price and the initial value of the forward contract? [Hint: what's the value of a forward contract at the initiation of the contract? 2.Three months later, the price of the stock is $52 and the risk-free rate of interest is still 8% per annum. What is the forward price of a new forward contract with the same expiration date as above? What is the value of the short position in the oldAssume you own a call option on IBM stock with a strike price of $40. The option will expire in exactly six months time. If the stock is trading at $35 in six months, what will be the payoff of the call? Options for above is { $0.00 , $10,00 , $15.00 , $75.00 , $95.00 } Assume that you have shorted the call option described above, if the stock is trading at $55 in six months, what will you owe?Options for above is { $0.00 , $10.00 , $15.00 , $75.00 , $95.00 }If the stock is trading at $50 in six months, what will be the payoff of the call?Options for above is { $0.00 , $10.00 , $15.00 , $75.00 , $95.00 }
- A stock has a spot price of $200. The stock pays a $5 dividend in 6 months. The continuous compounding risk-free rate for all maturities is 9%. What is the equilibrium price of a 2-year forward contract?You purchase 36 call options on Greshak Corp. to increase returns on your equity portfolio. The three month calls specify the strike price is $48.00 and require a premium of $3.25. If Greshak's stock is trading at $52.00 at the time the options expire, what are your options worth? What was your net profit (in dollars and as an annualized percentage)? What would your profit in dollars and as an annualized percentage had been if the stock instead sold for $51.00/share at expiration? How about $50.00/share?Company ABC's stock is currently trading at $22 and is forecast to either increase by 20% orfall by 15% in 3 months. The 3-month interest rate is 1.5%. Assuming there is no active optionsmarket, an investor wishing to buy a call option on ABC stock with an exercise price of $20will: a. Long 0.831 units of ABC stock and lend $15.54b. Long 0.831 units of ABC stock and borrow $15.31c. Long 1.203 units of ABC stock and lend $15.31 d. Long 1.203 units of ABC stock and borrow $15.54e. None of the above
- A stock will pay a dividend of $3 in 4 months and $4 in 8 months. The current price of the stock is $408. If the risk-free rate for all maturities is 5.19%, what is the arbitrage profit of a 12-month forward contract on the stock if its current price is $600? Group of answer choices $230.685 $195.195 $177.45 $195.195 $221.813A stock currently trades for $120 per share. Call options on the stock are available with a strike price of $125. The options expire in one month. The annualized risk free rate is 3%, and the expected volatility (annual) for the stock is 35%. Use the Black-Scholes option pricing model to calculate the price of the call option.You shorted a call option on Intuit stock with a strike price of $38. When you sold (wrote) the option, you received $3. The option will expire in exactly three months' time. a. If the stock is trading at $49 in three months, what will your payoff be? What will your profit be? b. If the stock is trading at $35 in three months, what will your payoff be? What will your profit be? c. Draw a payoff diagram showing the payoff at expiration as a function of the stock price at expiration. d. Redo c, but instead of showing payoffs, show profits. Question content area bottom Part 1 a. The payoff of the short is $ short is $ enter your response here. enter your response here, and the profit of the. Please step by step answer.
