What is the time value of each option

Assignment Help Financial Management
Reference no: EM131525011

You are given the following information concerning options on a particular stock: Stock price = $43 Exercise price = $40 Risk-free rate = 6% per year, compounded continuously Maturity = 6 months Standard deviation = 39% per year

a. What is the intrinsic value of each option? (Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations.) Intrinsic Value  Call option $  Put option $   

b. What is the time value of each option? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Time Value  Call option $  Put option $

Reference no: EM131525011

Questions Cloud

What were some potential complication that could have arisen : What were some potential complications that could have arisen in the AT&T-Unisource joint venture? What strategic factors might have influenced the entry mode?
What is the value of operations : The financial statements of Lioi Steel Fabricators are shown below, with the actual results for 2006 and the projections for 2007.
Determine ethical issue that may arise from social debate : Determine one (1) ethical issue that may arise from social debate as a result of the requirement in question
Estimate the cost today of an options strategy : FIN 6644 Global Financial Strategies Detail the hedging strategy with options and estimate the cost today of an options strategy that will eliminate exchange rate risk.
What is the time value of each option : What is the intrinsic value of each option? What is the time value of each option?
Thought of for evaluating the hazard : In your response to other students in the course, offer them some ideas that they may not have thought of for evaluating the hazard.
Reflect on various elements related to conveying messages : Would you know how to engage appropriately with a client under such conditions?Identify & reflect on various elements related to conveying effective messages.
Consideration of the ideas and concepts : Your paper should demonstrate thoughtful consideration of the ideas and concepts presented in the course by providing new thoughts and insights.
What is the price per share : The balance sheets of Roop Industries are shown below. The 12/31/2006 value of operations is $651 million and there are 10 million shares of common equity.

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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!

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