Solution-What is the percentage up movement

What is the percentage up movement

Assignment Help Finance Basics

Reference no: EM132711504

The current price of a non-dividend-paying biotech stock is $140 with a volatility of25%. The risk-free rate is 4%.

(a) What is the percentage up movement?

(b) What is the percentage down movement?

The percentage of down movement is 11.75%

(d) What is the probability of a down movement in a risk-neutral world?

Use a two-step tree to value a six-month European call option and a six-month

European put option. In both cases the strike price is $150.

Suppose that a trader sells 10,000 European call options. How many shares of the stock are needed to hedge the position for the first and second three-month period? For the second time period, consider both the case where the stock price moves up during the first period and the case where it moves down during the first period.

Reference no: EM132711504

Questions Cloud

Which set of measures are appropriate in monitoring : Which set of measures are appropriate in monitoring 'customer retention'? Customer satisfaction rating, number of repeat purchases, customer acquisition costs

Solve the minimum amount that division a would accept : Division A is operating at full capacity and sells all of output. Calculate the minimum amount that Division A would accept to transfer the part to Division B.

Weighted average cost of capital of swift plc : The tax rate is 20%. What is the weighted average cost of capital (WACC) of the company?

Compute how many units must be sold to break-even : Compute How many units must be sold to break-even? Round to two decimal places. Tim Taylor has written a self improvement book

What is the percentage up movement : The current price of a non-dividend-paying biotech stock is $140 with a volatility of25%. The risk-free rate is 4%.

Disease control and education plan : What percentage of population was affected by the disease? What measures would you suggest in the plan to actually reduce health risks?

Explain three features of pacioli double-entry bookkeeping : Explain three features of Pacioli's double-entry bookkeeping appendix that can justifiably be considered majors step in the development of accounting.

Compute annual discrete yield to maturity : You observe a zero coupon Govt Bond trading at A=98.88 which will replay 100 in a year; calculate its annual discrete yield to maturity in % to 3 dec places.

Find credit to the profit or loss summary account would be : End of year records for Ashley's Florist show, During the closing process the credit to the Profit or Loss Summary account would be?

User Account

All Pages

What is the percentage up movement

Reference no: EM132711504

Reference no: EM132711504

Questions Cloud

Reviews

Write a Review

Finance Basics Questions & Answers

Financial reporting and analysis

A report on financial accounting

Describe the types of financial ratios

Differences between sole proprietorship and corporation

Prepare a cash budget statement

What are the implied interest rates

State pricing theory and no-arbitrage pricing theory

Small business administration

Effect of financial leverage

Evaluate the basis for the payment to the lender

Importance of opps, ipps, mpfs and dmepos

Time value of money

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT