What is the price of a 3 month european put option

Assignment Help Financial Management

Reference no: EM131237087

1. The price of a non-dividend-paying stock is $19 and the price of a 3-month European call option on the stock with a strike price of $20 is $1. The risk-free rate is 4% per annum. What is the price of a 3-month European put option with a strike price of $20?

2. Explain why the arguments leading to put-call parity for European options cannot be used to give a similar result for American options.

3.What is a lower bound for the price of a 6-month call option on a non-dividend-paying stock when the stock price is $80, the strike price is $75, and the risk-free interest rate is 10% per annum?

Reference no: EM131237087

Questions Cloud

According to seu discussion board policy : The original posts to the discussion are due according to SEU Discussion Board policy, which gives our team ample opportunity to engage in dialogue, probe, and contribute to the threads of the conversations.

How many electrons make up one coulomb of charge : How many electrons make up one coulomb of charge? (Hint: q = ne.) An object has one million more electrons than protons. What is the net charge of the object?

Which of your listed benefits is the strongest and state why : For public administrators, analyze the possible benefits of a public administrator knowing how to research regulation. Determine which of your listed benefits is the strongest and state why.

How might your logic differ in other cultures : How do you create a "logical argument" (such as convincing your boss to adopt a business proposal) in your culture? How might your logic differ in other cultures? 400 words

What is the price of a 3 month european put option : Explain why the arguments leading to put-call parity for European options cannot be used to give a similar result for American options.

Find the current in the wire : What are the forces on two charges of +0.50 C and +2.0 C, respectively, if they are separated by a distance of 3.0 m? There is a net passage of 4.8 x 1018 electrons by a point in a wire conductor in 0.25 s. What is the current in the wire?

Force of electrical attraction between proton and electron : Find the force of electrical attraction between a proton and an electron that are 5.3 x 10-11 m apart (the arrangement in the hydrogen atom). Compare this to the gravitational force between these particles (see Chapter 3.5).

What is a subprime mortgage : What is a subprime mortgage? - Why do you think the increase in house prices during the 2000 to 2007 period is referred to as a bubble?

Identify current issue about the american healthcare system : Identify a current issue being debated about the American healthcare system. Explain two competing solutions to this problem. Evaluate which one is preferable.

User Account

All Pages