What is the percentage increase in the up solution

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A call option on APP has a strike price of $529.1 million. The stock is currently $520. In one year there are two possible outcomes $616 or $440. The risk free rate is 5.97% per year. Answer in % round to two decimals.

What is the percentage increase in the up solution?

What is the risk free neutral probability of the up movement of the investment? Answer in %

What is the value of a call today?

Use the put call parity condition to find the value of a put with the same strike price and maturity.

Value a put on APPif the strike price is equal to the current price of the stock and all else(up, down, rate) is the same. Use the risk neutral method. Remember that for a put exercise value= Max[stock price-exercise price,0]

Reference no: EM132710083

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