What is the option worth today

Assignment Help Financial Management

Reference no: EM132018576

The stock of LOL is worth $15. You are looking at buying a call option with a strike price also at $15 that expires in one year. If the stock price can either be $12 or $18 in a year from now, what is the option worth today if the one year risk free rate is 5%. Use the binomial option pricing model to find this value.

Reference no: EM132018576

Questions Cloud

Organizations disaster recovery and business continuity plan : Write a paper comparing your organization's disaster recovery and business continuity plans with the best practices .

What is maximum price she should be willing to pay for bond : what is the maximum price she should be willing to pay for the bond?

What is the new npv of the project : Incorporating these new values, and the real option, what is the new NPV of the project?

Identify a feature-length film that fits the genre : Identify a feature-length film that fits this genre and provide a basic summary of the movie. As you develop this summary, remember the differences.

What is the option worth today : what is the option worth today if the one year risk free rate is 5%. Use the binomial option pricing model to find this value.

Assess preparedness for an information systems leadership : Assess your preparedness for an information system's leadership and management position based on what you have learned in your graduate degree program.

Standard deviation of returns : A share of JMP stock sells for $65 and has a standard deviation of returns of 20 percent per year.

Describe a major theme of the movie : Describe a major theme of the movie you have selected using evidence from the movie itself as well as course resources and other scholarly sources to support.

Financing new business corporation : Write a 1-2 page essay considering the types of stock you might issue if you were financing a new business corporation.

User Account

All Pages