What is the value of a 4-month european put option

Assignment Help Finance Basics
Reference no: EM13305283

Currently, a stock price is $80. It is known that at the end of 4 months it will be either $71 or $90. The risk-free rate is 6% per annum with continuous compounding. What is the value of a 4-month European put option with a strike price of $80?

Reference no: EM13305283

Questions Cloud

What is the company cost of capital : What is the company cost of capital?
Explain how to estimate the power output of the arrangement : A hydroelectric facility operates with an elevation difference of 50.0 m with a flow rate of 500 m3/sec. If the rotational speed is 90 rpm, determine the most suitable type of turbine and estimate the power output of the arrangement.
Determine the age of the old sample in years : The amount of 14C in an old, isolated sample of vegetation is 0.666 that expected from a present day sample with an equivalent carbon content
Determine the size of the object : A converging lens with a focal length of 12.0 cm forms a virtual image 8.00 mm tall, 17.0 cm to the right of the lens. Determine the size of the object
What is the value of a 4-month european put option : Currently, a stock price is $80. It is known that at the end of 4 months it will be either $71 or $90. The risk-free rate is 6% per annum with continuous compounding. What is the value of a 4-month European put option with a strike price of $8..
Determine what is the change in head across the turbine : A 0.9 efficient Francis turbine produces 200 MW with a speed of 150 rpm. The blade height is 1.0 m, and the inlet radius of the rotor is 7.0 m. The flow exits the turbine in a radial direction.
Estimate the density of the unknown liquid : The figure below shows a mercury barometer. Consider two barometers, one using mercury and another using an unknown liquid. estimate the density of the unknown liquid
Determine the maximum power output of the pelton wheel : A Pelton wheel, located at an elevation of 200.0 m, is used to extract power from a reservoir at an elevation of 800 m. A penstock 1500 m long and 0.8 m in diameter connects the reservoir with the nozzle of the Pelton wheel.
Describe how well logging technique is being used in a u.s. : Describe how a well logging technique is being used in a U.S. oil bearing formation and Did the student set the basis for the discussion

Reviews

Write a Review

Finance Basics Questions & Answers

  Calculate the stock value

Calculate the stock's value if it paid a $4 dividend last year, expects dividends to grow by 21 percent in years 1 & 2 and 10 percent dividend growth in year 3.

  Calculate total interest due on maturity

A equipment originally had an estimated useful life of 5 years, but after 3 complete years, it was decided that the original estimate of useful life should have been ten years.

  Qualified plans

Find the  qualified plans for  Thomas to establish.

  Effect of currency appreciation

Suppose that one swiss franc could be purchased in the foreign exchange market for $0.60 today. If the franc appreciated 10% tomorrow against the dollar, how many francs would a dollar buy tomorrow?

  Finance details of foreign project

A foreign project that is profitable when valued on its own will always be profitable from the parent firm's standpoint. True or false? Explain.

  Levered and unlevered beta

A company currently has a capital structure consisting of 30% debt, and 70% equity. What would if be if this company raises its debt ratio to 50%? What would its cost of equity change?

  Creation of a financial plan

Assignment overview This assignment has a management accounting orientation. It draws on management accounting topics that include budgeting, sensitivity analysis, cost volume profit analysis and decision-making.

  What is difference between ccc expected roe

what is difference between CCC's expected ROE if it finances with 50% debt versus its expected ROE if it finances entirely with common stock?

  Understanding municipal bonds

Illustrate out municipal bonds? We are comparing the equivalent tax-free rate of two investments: 1) A taxable corporate bond that is at a rate of 10%, with a marginal tax of 30%

  Market determined interest rates and discount rates

The basket of goodies expenses $300, and is expected to cost $515 next year. The real rate of interest is 2%. Our company, Basic, Inc. has a bond risk premium of 2.5 percent and a preferred stock risk premium of 3 percent.

  What is the arithmetic average return

The return on your portfolio over the last 5 years were -5%, 20%,0%,10%, and 5%. What is the arithmetic average return?

  Can champoux pay the proposed dividend

The firm's bond indenture prohibits the payment of dividends unless the cash flow (before dividends and sinking fund payments) is greater than the total of dividends, interest, and sinking fund obligations.

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