Estimate the delta of the option from your tree

Assignment Help Finance Basics
Reference no: EM13286249

An American put option to sell a Swiss franc for dollars has a strike price of $0.80 and a time to maturity of 1 year. the Swiss franc's volatility is 10%, the dollar interest rate is 6%, the Swiss franc interest rate 3%, and the current exchange rate is 0.81. Use a three-step binomial tree to value the option. Estimate the delta of the option from your tree.

Reference no: EM13286249

Questions Cloud

What is the efiective resistance of the t.v. set : A typical color television draws about 2.9 A when connected to a 150 V source. What is the efiective resistance of the T.V. set
How many moles of o2 are needed for the complete reaction : How many moles of O2 are required for the complete reaction of 43.5 g of C2H4 to form CO2 and H2O
Find the polarization state of the transmitted beam of wave : A half-wave plate has a phase retardation of π. Assume that the plane is oriented so that the azimuth angle (i.e., the angle between the x-axis and the slow axis of the plate) Ψ=0. a. Find the polarization state of the transmitted beam, assuming t..
Explain moles of o2 are required for the complete reaction : How many moles of O2 are required for the complete reaction of 43.5 g of C2H4 to form CO2 and H2O
Estimate the delta of the option from your tree : The Swiss franc's volatility is 10%, the dollar interest rate is 6%, the Swiss franc interest rate 3%, and the current exchange rate is 0.81. Use a three-step binomial tree to value the option. Estimate the delta of the option from your tree.
Calculate the final temperature of the ice tea : 220 cm3 of hot tea at 89°C are poured into a very thin paper cup with 70 g of crushed ice at 0°C. Calculate the final temperature of the "ice tea"
What is the net charge on the balloon : You rub an inflated balloon on the carpet and it acquires a potential that is 1560 V lower than its potential before it became charged. what is the net charge on the balloon
Explain an athlete wants to acquire red blood cells : An athlete wants to acquire red blood cells from a donor with the same blood type. Taking into consideration that blood is composed of three components, plama, red blood cells, and leukocytes. what instrument have used in our lab experiments that ..
Define how many grams of can be produced : How many grams of can be produced from 3.15 of. Express your answer numerically in grams.

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the best way to select a project

What is the best way to select a project that has resource restrictions? Explain.

  Advantages in forming strategic alliances

In brief discuss why domestic company desirous of entering foreign markets may see attractive advantages in forming strategic alliances with foreign companies. What are the risks and disadvantages of such alliances?

  What is the proper cash flow amount

What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project? (Enter your answer in dollars, not millions of dollars, i.e. 1,234,567.)

  Calculation of various ratios to measure liquidity

I need yearly reports for a company which are for last 4 years starting 2005 or 2004 provided no major sale or acquisition or merger has taken place in the last four year period.

  At what debt ratio is the company wacc minimized

At what debt ratio is the company's WACC minimized? Round your answer to two decimal places.

  Discuss how ssc stockholders will view each

Discuss how SSC's stockholders will view each of these actions, and how they will affect the stock price.

  Explain which project should be selected

Project A and Project B will both cost $10,000. Project A returns $3,000 a year for 7 years. Project B returns $5,000 a year for 2 years. Using the payback period explain which project should be selected?

  What would the net annual savings be

What is the NPV of accepting the lockbox agreement?

  How much was the firm net income

The company had $16,500 of outstanding bonds that carry a 7.25% interest rate, and its federal-plus-state income tax rate was 35%. How much was the firm's net income? The firm uses the same depreciation expense for tax and stockholder reporting pu..

  How is the investor affected

An investor undertakes an investment in Russia in rubles (the local currency). How is the investor affected if the ruble ends up devaluing more rapidly than originally expected with respect to the U.S dollar?

  Explain the logic behind the establishment of gold standard

Why would a multinational be willing to issue a bond in a foreign country and what would be the motivation?  How can they attempt to minimize their risk is they do issue these bonds?

  What is the net present value of this project

The tax rate is 35%. Your estimated cost of capital is 10%. What is the net present value of this project?

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