What is the value of a six month european call option

Assignment Help Finance Basics
Reference no: EM13265262

A futures price is currently 60. It is known that over each of the next two three month periods it will either rise by 10% or fall by 10%. The risk free interest rate is 8% per annum. What is the value of a six month European call option on the futures with a strike price of 60? If the call were American would it ever be worth excerising it early?

Reference no: EM13265262

Questions Cloud

What is the value of a nine month european call : What is the value of a nine month European call on the futures with a strike price of 26?
Write argumentative essay about saudi woman : Write argumentative essay about Saudi woman and why some people want her to drive and other do not.
What does delta represent in this setting : What is the delta of this option and what does delta represent in this setting?
Design a buck converter to produce an output voltage : Design a buck converter to produce an output voltage of 18 V across a 10- load resistor. The output voltage ripple must not exceed 0.5 percent. The dc supply is 48 V. Design for continuous inductor current.
What is the value of a six month european call option : What is the value of a six month European call option on the futures with a strike price of 60? If the call were American would it ever be worth excerising it early?
What was the rate of return on the investment : An investment of $100,000, increased to $168,510 over a 5 year period. What was the rate of return on the investment?
What is the value of a sux month put option on the index : The risk free rate is 8% and the dividend yield on the index is 3%. What is the value of a sux month put option on the index with a strike price of 300 if it is a) European and b) American?
Compute the number of grams of sulfuric acid : Calculate the number of grams of sulfuric acid in 1 gallon of battery acid if the solution has a density of 1.28 g/mL and is 38.0% sulfuric acid by mass.
Find the generalized fourier series coefficients of signal : Find the generalized fourier series coefficients corresponding to these basis signals for the signal x(t) = 0.5(t-1)^2 in the interval 0

Reviews

Write a Review

Finance Basics Questions & Answers

  Recommendations for a cash management plan

Marcia and Phil Helm, a couple in their thirties, have been married for many years. They have no children, and each has a professional career. Marcia is a trainee for a management position at a big department store, and Phil is an engineer at an elec..

  Find the best financing alternative

Drexel Corporation is a United State based company that is establishing a project in a politically unstable country. It is planning two possible sources of financing.

  How about foreign investments

If you would be index funds, which ones? How about foreign investments?

  Will an exclusion result in partial recovery

Will an exclusion result in partial recovery? Illustrate your answer to the previous two questions with examples from the HO.

  Disadvantages of higher interest rates on investments

While everyone dreams of high interest rates for investments, usually high interest rates come with other disadvantages. Using the interest or other sources, research and write an essay on the advantages and disadvantages of higher interest rates ..

  Determine after-tax cash flows

The Great Computer Corporation, a United State company, has a subsidiary in the Netherlands. It is deciding whether to invest $2 million of its funds in a three year project in the Netherlands.

  What is the company taget debt equity ratio

Fama's lamas has a weighted average cost of capital of 9.6%. The comapny's cost of equity is 12%, and its pretax cost of debt is 7.9% The tax rate is 35%. What is the company's taget debt equity ratio?

  Find the value of depreciation change

Reported $9,000 of sales, $6,000 of operating costs other than depreciation, and $1,500 of depreciation. The company had no amortization charges, it had issued $4,000 of bonds that carry a 7 percent interest rate,

  Discuss two factors that may affect a person''s credit score

Discuss two factors that may affect a person's credit score and apply the notion of moral hazard to your response.

  Before and after tax cost of debt

Assume that Dell issued 30-year bonds, 8% coupon rate, semiannual, 7 years ago. The bond currently sells for 108% of face value. The company's tax rate is 35%. What is the pretax cost of debt?

  What is the company pre-tax cost of debt

This bond is currently selling for 92 percent of its face value. What is the company's pre-tax cost of debt?

  How much can yakima withdraw up front to invest

How much can Yakima withdraw at the end of each month (12 months per year) to have the fund last 30 years and still have $100,000 in the fund at the end of the 30 years (just to be safe)?

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