What is the new value of the call option

Assignment Help Financial Management

Reference no: EM131813094

A call option is offered on a stock; the option has an expiration of 55 days and a strike price of $50. The underlying stock to the call option trades for $33.15. The volatility of the stock is 30% per year, and the risk-free rate is 1.5% per year. a) Value the call option. b) If the stock price increases to $65.00, and everything else stays the same, what is the new value of the call option?

Reference no: EM131813094

Questions Cloud

Calculate the profit-loss he made from investment : Calculate the profit/loss he made from XYZ investment. If loss, enter a negative number.

Difference between the operating cycle and cash cycle : What is the difference between the operating cycle and cash cycle?

Calculate fields and struther free cash flow : Calculate Fields and Struthers’ investment in operating capital for 2018.

Corporation is tax deduction for the paying corporation : Interest paid by a corporation is a tax deduction for the paying corporation, but dividends paid are not deductible.

What is the new value of the call option : A call option is offered on a stock; the option has an expiration of 55 days and a strike price of $50. what is the new value of the call option?

Arithmetic gradient cash flow series for years : The future worth in year 10 of an arithmetic gradient cash flow series for years 1 through 10 is $725,000.

Assume that your project has started to slip dramatically : Assume that your project has started to slip dramatically. Let’s further assume that the project deadline is fixed and can't change.

Research and development arm of more well established firms : How can mergers act as the research and development arm of more well established firms?

Compute the firm book value of equity per share : The firm has 1,000,000 shares of common stock outstanding. Compute the firm’s book value of equity per share.

User Account

All Pages