Price of put option with the same exercise price

Assignment Help Financial Management
Reference no: EM131873202

A stock is currently selling for $68 per share. A call option with an exercise price of $72 sells for $3.40 and expires in three months.

If the risk-free rate of interest is 2.8 percent per year, compounded continuously, what is the price of a put option with the same exercise price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Put price $

Reference no: EM131873202

Questions Cloud

What is the risk-neutral value of the call option : If the risk-free rate is 4 percent, what is the risk-neutral value of the call option?
What is the value of call option : Suppose the current price of the stock is $95. What is the value of the call option if the exercise price is $80 per share?
How much should you charge for the option : The risk-free rate of interest is 3 percent per year, How much should you charge for the option?
Purchasing power and gains in replacement value : Why, despite not being sensitive to depreciation expenses, purchasing power and gains in replacement value,
Price of put option with the same exercise price : If the risk-free rate of interest is 2.8 percent per year, compounded continuously, what is the price of a put option with the same exercise price?
Bond price in dollars and percentage terms : What will be the change in the bond’s price in dollars and percentage terms?
What is the adjusted present value of this project : All principal will be repaid in one balloon payment at the end of Year 15. What is the adjusted present value of this project?
A rich relative has bequeathed you growing perpetuity : A rich relative has bequeathed you a growing perpetuity. What is? today's value of the? bequest? What is the monthly downside risk?
Compute ross regular pay-overtime pay-gross pay : Compute Ross’s regular pay, overtime pay, gross pay, and net pay.

Reviews

Write a Review

Financial Management Questions & Answers

  Provide a rationale for the stock repurchase

MGM Grand said it plans to eventually buy back up to 20% of its shares (from stockholders) and announced a tender offer for half of them at a 31% premium (over the market price). Provide a rationale for the stock repurchase.

  Compute the mean and standard deviation of hpr on stocks

Suppose your expectations regarding the stock price are as follows: State of the Market Probability Ending Price HPR (including dividends) Boom 0.22 $140 49.5% Normal growth 0.21 110 21.5 Recession 0.57 80 –19.0 Use Equations formula37.mml, formula55..

  What is meant by the term liquidity

What is meant by the term liquidity? What is the difference between the current ratio and the quick ratio and why might a company be interested in quick ratio.

  Analyze what are some of the techniques that can be used

Financial mangers make decisions today that will affect the firm. Analyze What are some of the techniques that can be used to adjust for these differences?

  Determine the cash inflows and outflows for each year

Determine the cash inflows and outflows for each year - evaluate the capital project by calculating the following metrics.

  What is the price of the annual coupon bond

Another bond of equal risk, maturity, and par value pays an 8% annual coupon. What is the price of the annual coupon bond?

  Dividend payout ratio remain constant-value of company stock

Assume a company has just paid an annual dividend of $0.95. Analysts are predicting an 11.1% per year growth rate in earnings over the next five years. After that, the company's earnings are expected to grow at the current industry average of 4.8% pe..

  What is the projects payback period

What is the project's payback period? If the firm has a 5-year payback requirement, should it accept the project? Explain.

  Determine the recommended decision under priori criterion

Determine the recommended decision under the a priori criterion if the company feels that the new process has an 80 percent chance of being efficient.

  Compute the standard deviation of monthly returns

Compute the standard deviation of PG&E’s monthly returns.

  Compute the company cost of debt capital

Assume that the interest rate on a comapny's debt is 6% and that the company's tax rate is 35%. Compute the company's cost of debt capital.

  Trenton worked on four jobs during its first year

Trenton worked on four jobs during its first year of operation: nos. 401, 402, 403, and 404. A review of job no. 403's cost record revealed direct material charges of $40,000 and total manufacturing costs of $50,000. If Trenton applies overhead at 15..

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!

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