Solution-Expected value of the option profit

Expected value of the option profit

Assignment Help Finance Basics

Reference no: EM131238586

A day trader buys an option on a stock that will return $100 profit if the stock goes up today and lose $400 if it goes down. If the trader think there is 75% chance that the stock will go up.

What is the expected value of the option's profit?

What do yo think of the option?

Reference no: EM131238586

Questions Cloud

Compare the results to those from zeroinflated poisson model : what is the difference in assumptions between the two models regarding the source of zero counts? (Note that the coefficients in the probability model estimate P(Y > 0|z), but predict(..., type = "prob") returns P(Y = 0|z).)

Compare the number of successful skin grafts : A plastic surgeon wants to compare the number of successful skin grafts in her series of burn patients with the number in other burn patients. A literature survey indicates that approximately 30% of the grafts become infected but that 80% survive.

Examine how well each model estimates the number of 0 counts : Estimate the zero-inflated Poisson regression model to predict the number of physician office visits. Use all of the explanatory variables in a linear form without any transformations for the log(µi) part of the model and no explanatory variables ..

What themes are present in anna and the tropics : What artifacts in the characters' lives might be part of the physical environment? In what ways is the environment personalized? Is one character's point of view more important than another's in determining the details of the physical environment?..

Expected value of the option profit : What is the expected value of the option's profit? What do yo think of the option?

Find the a at which l/d is maximum : Find the α at which L/D is maximum. Use different algorithms presented in this chapter to arrive at the optimum.

Consumers read nutrition facts on products : 33% of consumers read nutrition facts on products. For a sample of 270 consumers, what is the probability that between 81 and 100 of them read the nutrition facts?

Find i and v as marked in figures : Find I and V as marked in figure below. and also show your work. - For this circuit, also record how long it took to solve the problem.

How much should the company invest in risky assets : How much should the company invest in risky assets (R), to maximize its wealth at the end of a stipulated period? Formulate the objective function for the optimization problem.

User Account

All Pages

Expected value of the option profit

Reference no: EM131238586

Reference no: EM131238586

Questions Cloud

Reviews

Write a Review

Finance Basics Questions & Answers

Financial reporting and analysis

A report on financial accounting

Describe the types of financial ratios

Differences between sole proprietorship and corporation

Prepare a cash budget statement

What are the implied interest rates

State pricing theory and no-arbitrage pricing theory

Small business administration

Effect of financial leverage

Evaluate the basis for the payment to the lender

Importance of opps, ipps, mpfs and dmepos

Time value of money

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT