Determine what is the current stock price

Assignment Help Finance Basics
Reference no: EM132064751

Question: A put option and a call option with an exercise price of $55 and three months to expiration sell for $1.20 and $5.30, respectively. If the risk-free rate is 4.5 percent per year, compounded continuously, what is the current stock price? The response must be typed, single spaced, must be in times new roman font (size 12) and must follow the APA format.

Reference no: EM132064751

Questions Cloud

Calculate the npv of the project using given data : Purple Haze Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $520,000 is estimated.
What is the purpose of tranching in securitization : What is the purpose of tranching in securitization? I know it means setting different levels of priority to the bonds. The lowest rated bonds would absorb.
Unless far out-of-the money or far in-the-money : Unless far out-of-the money or far in-the-money, for otherwise identical call options, the longer the term to expiration, the lower the price for
What two differences would you observe : If you compared histograms of large-company stocks versus small- company stock , what two differences would you observe?
Determine what is the current stock price : A put option and a call option with an exercise price of $55 and three months to expiration sell for $1.20 and $5.30, respectively.
What is the intrinsic value of the option : A put option has an exercise price of $40 and the call premium is $5. The current market price of the underlying stock is $38.
What is the expected value of target company : The discount rate is estimated to be 14 percent during the high growth period. What is the expected value of Target Company?
What would the annual yield to maturity be on the bond : A few years ago, Spider Web, Inc. issued bonds with a 11.65 percent annual coupon rate, paid semiannually.
What is the relationship between authentic leadership : What is the relationship between authentic leadership, Leader-Member Exchange (LMX) and employees' Psychological Capital (PsyCap)?

Reviews

Write a Review

Finance Basics Questions & Answers

  Distinguish between offer for sale and public issue of share

Distinguish between an offer for sale and a public issue of shares.

  What are william’s monthly payments

William recently graduated from NFA University. While at NFA, William took out a $50,000 student loan. His loan requires him to make monthly payments for a 10-year period.

  What is the expected return on complete portfolio

What is the expected return on complete portfolio?

  Find the amount of interest earned in the fifth year

Assume that delta t = 1/[10(1 + t)^2] and A(0) = 100. Find the amount of interest earned in the fifth year.

  A put option sells for 120 per share the current stock

1.a put option sells for 1.20 per share. the current stock price is 20.00 and the exercise price is 19.00. what is the

  What will the portfolio new beta be

If Jill replaces Stock A with another stock, E, which has a beta of 1.30, what will the portfolio's new beta be?

  An article in the wall street journal in early 2010

Over the past 35 years, has making loans to small business become a more important or a less important aspect of commercial banking? Briefly explain.

  What makes one better than the other

What makes one better than the other?

  What are frederick and georgine recognized gains

Frederick and Georgine each own investment properties that they would like to trade. They decide to exchange the properties as a like-kind exchange.

  How might a career change and affect your budget

How might a career change (perhaps into the field you researched for the discussion forum) and further education affect your budget?

  How to calculate the following questions in excel

How to calculate the following questions in excel? Suppose the standard deviation of the market return is 20%.

  What is the current share price

Gruber Corp. pays a constant $9 dividend on its stock. The company will maintain this dividned for the next 12 years and will then cease paying dividends forever. If the required return on this stock is 10 percent, what is the current share price?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd