The price of a european call that expires in six months

Reference no: EM13721774

The price of a European call that expires in six months and has a strike price of $30 is $2. The underlying stock price is $12. The continuously compounded risk-free interest rate is 10%. What is the price of a European put option on the same stock that expires in six months and has a strike price of $30?

Reference no: EM13721774

Questions Cloud

Analyze the importance of production planning : From the e-Activity, analyze the importance of production planning and scheduling within an organization. Evaluate a bad experience you have had with an appointment from both perspectives of the customer (you) and the organization due to ineff..

Problems that can occur when companies are categorized : Discuss the problems that can occur when companies are categorized as "STARS," "Questions Marks," "Cash Cows," or "Dogs."

Make the mistake of assuming : A) Many beginning marketing students make the mistake of assuming that some products can appeal to everyone. Pick a product that you believe has mass appeal and analyze.

He state view corporation has made an investment : He State View Corporation has made an investment of $90,000 that is expected to yield benefits over a nine-year period. Annual cash inflows of $110,395 and annual cash outflows of $75,000 are expected excluding taxes and depreciation. The ta..

The price of a european call that expires in six months : The price of a European call that expires in six months and has a strike price of $30 is $2. The underlying stock price is $12. The continuously compounded risk-free interest rate is 10%. What is the price of a European put option on the sa..

Option represents one share of stock : Suppose you buy a call with a strike price of $40, write a call with a strike price of $50, write a put with a strike price of $40, and buy a put with a strike price of $50. What is the total payoff (not profit) if the stock price is $53.67 a..

How was dodd-frank supposed to prevent : How was Dodd-Frank supposed to prevent that from happening again? Based on the examples that you use, do the authors of Regulating Wall Street think that Dodd-Frank will effectively keep those destabilizing practices from resuming?

What should be the yield to maturity on risk-free bonds : The rate of inflation for the next twelve months (Year 1) is expected to be 1.4%; it is expected to be 1.8% the following year (Year Two); and it is expected to be 2.0% every year after Year Two. Assume the real risk-free rate, r*, is 3 percent for a..

Expectations theory compute expected one year interest rates : The interest rate on one year treasury bonds is 1%, The rate on two year T-bonds is 0.9% and the rate on three-year T-bonds is 0.8%. Using the expectations theory compute the expected one year interest rates in (a) the second year (Year two only) and..

User Account

All Pages