User Account

All Pages

Intrinsic value and based the black scholes model

Assignment Help Finance Basics
Reference no: EM132054994

A 3 month call option is trading with an exercise price of US$50. The current price of the underlying stock is US$60. The risk free rate is 7% compounded continuously and the variance of the stock price return is 14.4%.

What is the Intrinsic Value  and Based the Black Scholes Model what is the total value of the call option and what accounts for the difference in the total value and the intrinsic value.

Reference no: EM132054994

Questions Cloud

What is the payout ratio : Ralston Gourmet Foods Inc. earned $245 million last year and retained $185 million.
What is the yield to maturity : There is a zero coupon bond that sells for $435.47 and has a par value of $1,000. If the bond has 14 years to maturity, what is the yield to maturity?
What are financial executives expecting : What are financial executives expecting for 2017 that will impact their businesses?
Explain why the test is appropriate for the example : Choose one (1) of the statistical tests presented in Chapter 2, and provide a real-world example in which it is applicable.
Intrinsic value and based the black scholes model : What is the Intrinsic Value and Based the Black Scholes Model what is the total value of the call option and what accounts
How advanced practice nurse can engage in community activism : Examine how advanced practice nurses can engage in community activism to limit further negative health impacts from Big Tobacco in their respective health.
What is the most you should pay today for investment : Assume you will receive your first payment at the end of 10 years and round your answer to the nearest dollar.
What effective annual rate : If it will cost $25,000 today. What effective annual rate (EAR) will you earn on this investment?
Different dividend policies based on perceived demographic : Would you set different dividend policies based on the perceived demographic of your investor? Does the firm's life cycle impact this decision?

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money 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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd