User Account

All Pages

Use the black-scholes option pricing model to estimate value

Assignment Help Finance Basics
Reference no: EM131135616

Targezept Bionics, Inc., has a common stock outstanding that sells for $21 per share. A call option on the stock has an exercise price of $20 and will expire in three months. Based on an analysis of the stock's past volatility, you have estimated the standard deviation of returns to be 0.6. The short-term interest rate is now 5 percent and you expect that to remain constant over the next six months. Use the Black-Scholes option pricing model to estimate the value of this option.

Reference no: EM131135616

Questions Cloud

Prepare staffing plan utilizing a level workforce strategy : The company currently has 10 associated. No more than 10 new hires can be accomendated in any month. No backorders are allowed, overtime can not exceed 25% of regular time capacity on any month, There is no cost for unused overtime. Prepare a staffin..
Find the following open circuit voltage : For the simple equivalent circuit of 0.017 m2 PV cell shown below, the reverse saturatoin current is I0= 4 * 10-11 A and at an insolation of 1-sun the short circuit current is Isc = 6.4 A. At 25 degrees C
What is the categorical imperative : What is the categorical imperative? Choose either the formula of universal law or the formula of humanity and explain Kant's argument for this formula of the categorical imperative in detail, leaving no step out.
Legal challenges be used to manage business risk : How can patents, copyrights, and legal challenges be used to manage business risk?
Use the black-scholes option pricing model to estimate value : The short-term interest rate is now 5 percent and you expect that to remain constant over the next six months. Use the Black-Scholes option pricing model to estimate the value of this option.
Entrepreneurship into organizational strategy : The president of your company has recently announced the need for a greater effort to incorporate innovation and entrepreneurship into organizational strategy, and has asked you to list the requirements necessary for this to happen. Explain why each ..
How does harris et al define professional ethics : How does Harris et al define professional ethics? What are some problems with Harris et als view that personal ethics should ordinarily be given up in favor of professional ethics.
Is there any new techniq invented to overcome this losses : Is there any new techniq invented to overcome this losses? May be laser type encoder
Draw an activity-on-arrow network : Draw an activity-on-arrow network - Given the sub networks below, follow all conventions used in class and calculate the four activity times for Activity B - calculate the four activity times for Activity B. No splitting allowed.

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