Discuss about the price of a European put option

Assignment Help Finance Basics
Reference no: EM131796001

Question: A certain stock pays no dividends and is priced by the market at $19. A European call with three months to expiration and an exercise price of $20 is priced in the market at $1. If the risk free rate is 4% per annum, what do you think the price of a European put option with the same time to expiration a strike price of $20?

Reference no: EM131796001

Questions Cloud

Given that a household does not have at least one dog : Given that a household does not have at least one dog, the probability that the same household does not have at least one cat is ___?
Determine the cost of goods sold for the month : Wasson sold 15 units on December 20. Determine the cost of goods sold for the month under the LIFO inventory method
Different recipes for chocolate fudge : Rachel is comparing three different recipes for chocolate fudge. She asks her friends to taste her fudge and rate how delicious it is. Her results are provided
Prepare the sales revenues section of the income statement : Maulder Company provides the following information for the month ended October 31, 2010: Prepare the sales revenues section of the income statement
Discuss about the price of a European put option : A certain stock pays no dividends and is priced by the market at $19. A European call with three months to expiration and an exercise price of $20 is priced.
What is the probability a random families : What is the probability a random families bill is more than $550 25.12% 74.86% 15.26% 24.86 %?
What is the impact on operating profit : Assume that the projected number of units sold for the year is 7,000. What is the impact on operating profit
What will be the percent change in net income : Chad Gates owns Strings Attached, a store that sells guitars. The company has $5 million in current annual sales, fixed operating costs of $300,000.
Pick out a pair for your business trip : You reach into the drawer in the dark and randomly pick out a pair for your business trip. What is the probability your pick out 1 yellow pair?

Reviews

Write a Review

Finance Basics Questions & Answers

  Behavioral finance and technical analysis

Assess the credibility of the behavioral critique of the efficient market hypostasis. Provide support for your rationale. Examine the results of technical analysis, and determine whether or not it works. Support your answer.

  Determine the company total profit for the year

A construction company has total revenues of $1,150,000, total construction costs of $956,000, and general overhead costs of $159,000 for the year. Determine the company’s total profit for the year and the percentage of the construction revenues that..

  What is the spot rate today

Tantrix, Inc., purchased its inventory from an Indian manufacturer at a cost of Rs.5,325,000. The dollar cost of this payable is $125,634.07 at todays spot rate. What is the spot rate today?

  An analyst has modeled the stock of crisp trucking using a

an analyst has modeled the stock of crisp trucking using a two-factor apt model. the risk-free rate is 6 the expected

  The mean number of strings per list

When n strings are hashed into m lists. the mean number of strings per list is n I m, no matter how unevenly the strings are distributed. Suppose that d is a "distribution," i.e., a random string is placed on the jth list with probability d(i).

  You have 4218053 in brokerage account and you plan to

you have 42180.53 in brokerage account and you plan to deposit an additional 5000 at the end of every futhure year

  The prize money of the canadian open tennis tournament

n 1970, the prize money of the Canadian Open Tennis tournament was $15,000. In 2012, the prize money was $2,648,700. What was the percentage increase in the prize money over this period? If the winner's prize continues to increase at the same rate, w..

  How much should you be willing to pay for the bond

Bond Valuation You are interested in buying a $1,000 par value bond with 10 years to maturity and an 8 percent coupon rate that is paid semiannually. How much should you be willing to pay for the bond if the investor's required rate of return is 1..

  Calculate pi for the following cash flow gross rev

How would we calculate PI for the following cash flow Gross Rev

  Innovations in conventional and islamic banking

1. Which banking sector (Conventional and Islamic) has higher risk appetite, and what precautions they follow?

  Compute the before- and after-tax costs of its debt

Compute the before- and after-tax costs of ITS debt. Compute the cost of equity (assuming all funds come from internal sources) Using the constant growth Gordon Dividend Valuation Model.

  Develop an analysis of the real state market

Develop an analysis of the real state market of Loudon County, Virginia. In your analysis includes what it has changed and what it has achieved (what cause the Loudon County residential keeps increasing such as transportation, school, etc.).

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