Black-scholes and asset value

Assignment Help Financial Management

Reference no: EM131976313

Black-Scholes and Asset Value. You own a lot in Key West, florida, that is currently unused. Similar lots have recently sold for $1,350,000. Over the past five years, the price of land in the area has increased 7 percent per year, with an annual standard deviation of 30 percent. A buyer has recently approached you and wants an option to buy the land in the next 12 months for $1,500,000. The risk-free rate of interest is 5 percent per year, compunded continuously. How much should you charge for the option?

Reference no: EM131976313

Questions Cloud

Examination of financial analysis methods : The final assignment of your project will require you to make a recommendation to finance an EHR system, based on information from previous assignments.

How much should you charge for the option : The risk-free rate of interest is 5 percent per year, compounded continuously. How much should you charge for the option?

How much is the stock currently worth : Nickel Case Corp. does not currently pay a dividend. how much is the stock currently worth?

Analyze what were of accomplishments of early muslim culture : Discuss the emergence of Islam in the seventh century. What do Muslims believe? What were some of the accomplishments of early Muslim culture?

Black-scholes and asset value : Black-Scholes and Asset Value. The risk-free rate of interest is 5 percent per year, compunded continuously. How much should you charge for the option?

Determine how to cultivate millennials as leaders : Evaluate how transformational leadership may assist in this process. Include at least one video presentation within a slide.

Compute the geometric mean annual rate of return : In the past five years, a stock’s annual rates of return were 40%, -20%, 22%, 0%, and -10%. Compute the geometric mean annual rate of return.

Explain the role of the labour party in british history : Explain the role of the Labour Party in British history? How did England respond to the economic crises of the 20th century, from after World War I to 1980?

Evaluate how the assessment could be altered : The purposes of this assignment is to review a case study concerning the legalities of employee assessments for succession planning purposes.

User Account

All Pages