Option expires the day after second period dividend is paid

Assignment Help Portfolio Management

Reference no: EM131451429

A stock's price is $100. Over each of the next two three month periods it is expected to go up or down by 15% or down by 10%. The risk free rate is 4% p.a. The stock pays a dividend of $1 per quarter. Assume the option expires the day after the second period dividend is paid.

a. What should be the current price of a 6-month European style put option with a strike price of $95?

b. What should be the current price of a 6-month American style put option with a strike price of $95?

c. What should be the current price of a 6-month European style call option with a strike price of $95?

d. What should be the current price of a 6-month American style call option with a strike price of $95?

Reference no: EM131451429

Questions Cloud

Does the fact that she did sign : Even though Dr. Olivieri later admitted that she should never have signed the agreement with Apotex that included a confi dentiality clause.

Lease is appropriately classified as a sales-type lease : On January 1, 2016, Oxley Corporation leased equipment to Bells Company. The lease term is 12 years. The first payment of $706,000 was made on January 1, 2016.

Submit a brief of the given palsgraf case : For this writing assignment, each student should submit a brief of the Palsgraf case, following the model below.

What are the confl icts of interest between them all : Was Olivieri's decision to publish her fi ndings about the trial an example of universalism or utilitarianism? Explain your answer.

Option expires the day after second period dividend is paid : The stock pays a dividend of $1 per quarter. Assume the option expires the day after the second period dividend is paid.

Describe the two specific systemic crises you have selected : Briefly describe the two specific systemic crises you have selected. Explain how the two crises are similar and how they are different.

Find the numbers : Three numbers, whose sum is 12, are in AP. If 1,2 and 6 are added to them, the resulting g numbers are in GP. Find the numbers

Determine discovered credible evidence : You work for a meatpacking company. You have discovered credible evidence that your company's delivery drivers have been stealing cuts of meat.

Option expires the day before second period dividend is paid : The stock pays a dividend of $1 per quarter. Assume the option expires the day before the second period dividend is paid.

User Account

All Pages