User Account

All Pages

What is the price of put should be

Assignment Help Finance Basics
Reference no: EM133275796

Problem:

European call option and put option on IBM stock have the same strike price and same time to maturity. Now, the price of the call is $3.35 and the price of the put is $0.85. One minitues later, news reaches the market increases volatilities (no effect on the stock price or interest rates). As a result the price of the call changes to $3.50.

What's the price of put should be? Please provide reason in detail.

Reference no: EM133275796

Questions Cloud

Estimate the value of the assets : Clementine County's assets have a market value of $8,000,000 and a duration of 27 at the current market interest rate of 5.5%. Use the duration formula to estim
What are child domains : Scenario: The Development group in a company wants to setup their own Child Domain to have full control on managing their accounts and policies. The Main IT gro
How does the film describe the rise of the ottomans : How does the film describe the rise of the Ottomans? How did the Ottomans expand? What was the relationship like between the Byzantine Empire and the Ottomans
Different types of employees employed by Eagle Air : The key theory to underpin the discussion and giving consideration to the different types of employees employed by Eagle Air.
What is the price of put should be : European call option and put option on IBM stock have the same strike price and same time to maturity. Now, the price of the call is $3.35 and the price of the
Perspective do you believe was missing from documentary : What documentary did you watch? What perspective do you believe was missing from the documentary?
Would russia be a winner in climate change : Would Russia be a "winner" in climate change? A positive might be that they would be able to produce more temperature climate crops like corn and lettuce
Participating non-recourse loan : She can alternatively refinance with a 10-year, $7.5 Million, participating non-recourse loan. The lender would receive 10% of the annual pre-tax profits, as we
Record the market price for tesla : Record the market price for Tesla together with the values of the S&P 500, DJIA, and NASDAQ. Explain in one paragraph your conclusion about such data.

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the project accounting rate of return

Capitol Corp. management is expecting a project to generate after-tax income of $77,270 in each of the next three years.

  What is the net investment in the truck project

You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck with the following additional facts.

  Challenges of high pressured sales goals

What personal and professional standards guide your response to the challenges of high pressured sales goals?

  Insider trading assignment

Based on your own experience and knowledge, develop conclusions and explain the ethical implications of financial decisions within an organization. You may need to do additional research on the implications of using insider information (for exampl..

  What is scientific software''s effective annual rate

The bank will adjust the accounts by 10% for returns and allowances. It then will lend up to 85% of the adjusted acceptable collateral. What is the maximum amount that the bank will lend to Scientific Software? What is Scientific Software's effective..

  Increasing number of two-income households

How have the needs for life insurance changed with the increasing number of two-income households?

  Synergistic benefits from the merger

Who, Inc., has offered $422 million cash for all of the common stock in Dunn IT Corporation. Based on recent market information, Dunn IT is worth $391 million

  Two simple models to measure credit risk concentration

Explain the two simple models to measure credit risk concentration in the loan portfolio: migration analysis and concentration limits.

  Who is the main object or subject of financial inclusion

1. Who is the main object or subject of financial inclusion? Begin your answer by saying "The Rich; or The Poor; or Both of them". Then include your reasons of

  How depreciation will affect the pv of the project

a - Sunk Cost; b- Opportunity cost; c - Erosion 6 - Explain how you would conduct a scenario and sensitivity analysis of the project? Project specific risks and market risks related to the project?

  Compute the firms cost of equity

The earnings, dividends, and stock value of Cattle Technologies Corporation are expected to grow at 8 percent per year in the future. Cattle's common stock sells for $30 each share,

  What is the net present value for machine

1. Econo-Cool Air Conditioners cost $450 to purchase and results in an electricity bill of $140 per year. The Econo-Cool Air Conditioners lasts for 5 years.

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd