Find the price of call option on stock

Assignment Help Financial Management

Reference no: EM131305040

The current price of a stock is $14. In 6 months, the price will be either $18 or $11. The annual risk-free rate is 6%. Find the price of a call option on the stock that has a strike price of $12 and that expires in 6 months. (Hint: Use daily compounding.) Round your answer to the nearest cent. Assume a 365-day year. Do not round your intermediate calculations.

Reference no: EM131305040

Questions Cloud

Describe the competition between two or more businesses : Describe the competition between two or more businesses. Post a link to the article or video in the discussion thread and describe in 2-5 sentences on the competing businesses and the products they sell.

Write a program that simulates an automatic teller machine : Design your interface to be similar to what you see on your local ATM. The user account information should be stored in a file when the program terminates. This file is read in again when the program restarts.

What is greatest leadership challenges you have ever faced : What is one of the greatest leadership challenges you have ever faced? What did you do? What was the result? Describe a situation in which effective interpersonal communication skills contributed to your success.

Continue the monthly withdrawals for the next four years : Starting one month from? now, you need to withdraw ?$ 200 per month from your bank account to help cover the costs of your university education. You will continue the monthly withdrawals for the next four years. If the account pays 0.3?% interest per..

Find the price of call option on stock : The current price of a stock is $14. In 6 months, the price will be either $18 or $11. The annual risk-free rate is 6%. Find the price of a call option on the stock that has a strike price of $12 and that expires in 6 months.

Description of the developmental stages of children : Description of the developmental stages of children from Birth to Age 5/Pre-K and K to Age 8/Grade 3 with examples - Description of the relationship between brain research and the developmental theories of learning.

Maintain constant growth rate in its dividends : Suppose you know that a company’s stock currently sells for $50 per share and the required return on the stock is 10 percent. You also know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield. If it..

Explain why you chose the first steps : Determine your first steps. Create requirement documents. Explain why you chose the first steps, in your status report due next week. Determine what is known and what is unknownabout the project. Explain why this might be important to the project.

Write a code that would modify the led brightness : ELEN 4486: Microcomputers Lab: Exploring PWM. Write a code that would modify the LED brightness according to a low-frequency sinusoid. Observe the corresponding voltage waveform on the scope, take a screenshot

User Account

All Pages