Explain how this change affects the value of the option

Assignment Help Financial Management

Reference no: EM13943040

If the original strike price of an option was $60 and the option was worth $7.16, then if the strike price changed to $65 dollars and the option lowered to $4.54. Explain how this change affects the value of the option?

Reference no: EM13943040

Questions Cloud

What is the stock current price per share-recapitalization : Tapley Inc. currently has total capital equal to $5 million, has zero debt, is in the 40% federal-plus-state tax bracket, has a net income of $1 million, and distributes 40% of its earnings as dividends. What is the stock’s current price per share (..

What is dramaturgy and why is it useful : What is dramaturgy and why is it useful for understanding day-to-day interactions? Provide an example of when you have used or witnessed dramaturgy in a social situation

Given a short-term scheduling algorithm : Explain why this algorithm favors I/O bound programs and yet does not permanently deny processor time to processor bound programs.

Assignment-business start up proposal : Bill, a close friend of your parents wants to start a business. Your parents refer him to you since you are presently working on a technology related degree. In your first discussion, you discover the following facts:

Explain how this change affects the value of the option : If the original strike price of an option was $60 and the option was worth $7.16, then if the strike price changed to $65 dollars and the option lowered to $4.54. Explain how this change affects the value of the option?

Variance and the standard deviation of the portfolio : A portfolio is made up of 75% of stock GS and 25% of stock BAC. Stock GS has a variance of .08, and stock BAC has a variance of .035. The covariance between the stocks is -.001. Calculate both the variance and the standard deviation of the portfolio.

Select the minimum devices that you must install : In reference to part B above, what device should be uninstalled before you proceed with the entire installation, to protect this device from damage?

Explain why this change affects the value of the option : When changing the risk free rate from 3% to 6%, the option value changes from $7.16 to $8.33. Explain why this change affects the value of the option?

If interest rates rise the current value of bond will rise : If interest rates rise, the current value of the bond will rise. If interest rates fall, the face amount of a bond will remain the same. An investor may anticipate that a callable bond may be called If interest rates have fallen.

User Account

All Pages