What is the option time premium

Assignment Help Financial Management
Reference no: EM131509929

Assume that a certain stock’s current price in the open market stands at $32.25 per share. The premium on the call option for this stock is currently $5.21. If the call option has a strike price of $30, what is the option’s time premium? Show all work.

Please answer without use excel, make it easy to look.

Reference no: EM131509929

Questions Cloud

How many additional dollars of interest : How many additional dollars of interest would you earn over 44 years from the account that pays 6.66.6?%?
Characteristics that differentiate eudicots from monocots : 1. Name five specific structural characteristics that differentiate Eudicots from Monocots.
What are the three branches of the criminal justice system : What are the three branches of the criminal justice system? What are the five stages of the criminal justice process
Summary of the background or history of the artist : Choose a musical artist (from any music era) and provide a 1-2 page summary of the background or history of the artist.
What is the option time premium : Assume that a certain stock’s current price in the open market stands at $32.25 per share. what is the option’s time premium?
What possible steps you can take to classify organism : How has DNA sequencing affected the science of classifying organisms? Discuss what possible steps you can take to classify organism.
What is the present value of your? inheritance : What is the present value of your? inheritance?
Which initial assessment methods would you use : Some methods of initial assessment appear to be more useful than others. If you were starting your own business, which initial assessment methods would you use?
Discuss the opposing views regarding sopa and pipa : Who controls the World Wide Web? Governments? Corporations? Private Individuals? Who stands to win or lose in a battle for control of the Web?

Reviews

Write a Review

Financial Management Questions & Answers

  What is the company dividend payment per share this year

What is the company's dividend payment per share this year?

  Equipment to actually produce widgets-submit a bid to supply

You are required to submit a bid to supply 200,000,000 widgets per year to the State of Illinois for the next five years. Your company has an idle tract of real estate that cost $1,500,000 ten years ago; if your company sold the land today, it would ..

  What would be the cost of new equity

Cost of Common Equity with Flotation Banyan Co.’s common stock currently sells for $53.25 per share. What would be the cost of new equity?

  What is the cash flow effect of selling the machine

Find the year zero cash flow. Find the depreciation tax shield for the three operating years. What is the cash flow effect of selling the machine?

  Budget set that is called the contingency budget

After determining the project budget, there is typically another budget set that is called the Contingency Budget.

  Calculate the delta-gamma-vega and theta

Calculate the delta, gamma, vega, theta and rho of the financial institution's position.

  What is the value of a put option with similar parameters

Determine the value of a call option on the JPY that has the following characteristics: (a) it is of type European (b) it matures in 9 months (c) the strike price is USD 0.010. In the spot market the JPY is trading at USD 0.008. The US and Japanese i..

  Estimate current market value of debt and equity

Hugo Boss AG is a German luxury fashion and style house that is examining its financing policy for possible changes. The firm has 8-year coupon bonds outstanding with a face value of $ 400 million and interest expenses of $18.0 million a year. Estima..

  Future value-annuity versus annuity due

Future value: annuity versus annuity due. What's the future value of a 11%, 5-year ordinary annuity that pays $700 each year?  If this was an annuity due, what would its future value be?

  What is the present value of your winnings

You have just received notification that you have won the $1.4 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday, 70 years from now. The appropriate discount rate is 8 percent. What is the presen..

  Deposit at beginning of year and interest earned during year

Year Account balance, beginning of year" "Deposit at beginning of year" "Interest earned during year" "Total in account, end year"

  What is the discount yield-bond equivalent yield

What is the discount yield, bond equivalent yield, and effective annual return on a $1 million T-bill that currently sells at 96 3/8 percent of its face value and is 60 days from maturity?

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