Find the worth of the put option

Reference no: EM131965087

Question: The current stock price of Johnson & Johnson is $74, and the stock does not pay dividends. The instantaneous risk-free rate of return is 4%. The instantaneous standard deviation of J&J's stock is 25%. You want to purchase a put option on this stock with an exercise price of $65 and an expiration date 54 days from now. Using Black-Scholes, the put option should be worth _____ today.

Reference no: EM131965087

Questions Cloud

Calculate the earning per share one-year ahead : The current price of Parador Industries stock is $66 per share. Current earnings per share are $3.6, the earnings growth rate is 4.5 percent.

Describe the situation as fully as you can-remember : Use the ladder of abstraction to describe the relationships between perception, communication and action in one interpersonal encounter in your life.

Compact principles related to the global economy : In what way are the UN Global Compact principles related to the global economy?

Summarize the steps followed by the crime scene investigator : Summarize the steps followed by the crime scene investigators including the mistakes and/or correct steps followed to process.

Find the worth of the put option : The current stock price of Johnson & Johnson is $74, and the stock does not pay dividends. The instantaneous risk-free rate of return is 4%.

Operate without traditional budgets : Do you think that an organization could operate without traditional budgets? If so, what might be used instead? And which references you based your answer on?

Substitute for bank borrowing in fueling growth : How do you see the role of corporate bonds as a substitute for bank borrowing in fueling growth? and what references you based your answer on?

Design an australian population calculator program : You will design and implement an Australian population (AP) calculator program for client that allows users to input state/territory name and the population.

Write a PLpgSQL function that takes a staffs id : PostgreSQL Database System Assignment - Project 2 PLpgSQL. Please write a PLpgSQL function Q2(staff_id integer) that takes a staff's id as parameter

User Account

All Pages