What must be price of an at-the-money european call option

Assignment Help Finance Basics

Reference no: EM13265908

A stock has price of 100. it is expected to pay dividend of $2 per share at year end. An at-the-money European put option with 1 year maturity sells for 7$. if the annual interest rate is 5%, what must be price of an at-the-money European call option on stock with 1 year maturity.

Reference no: EM13265908

Questions Cloud

What angle should the arrow make : An archer wishes to shoot an arrow at a target at eye level a distance of 49.0 m away. what angle should the arrow make with the horizontal as it is being shot

Calculate the intrinsic value and time value for each option : Find a mix of ten current call and put options for Apple, Inc. (AAPL) with different expiration months and exercise prices. Indicate which options are in the money. Calculate the intrinsic value and time value for each option.

Explain what is the temperature of the gas : A 1.0 dm^3 glass bulb contains 1.0x10^23 H2 molecules. If the pressure exerted by the gas is 100 kPa, what is (a) the temperature of the gas, (b) the root-mean-square speeds of the molecules, (c) Would the temperature be different if they were O2 ..

How far downstream does she travel : A river 107.3 m wide flows toward the south at 31.0 m/min. A girl on the west bank wishes to reach the east bank in the least possible time. How far downstream does she travel

What must be price of an at-the-money european call option : what must be price of an at-the-money European call option on stock with 1 year maturity.

Find total mechanical power produced by all four cylinder : In a certain automobile engine with an efficiency of 19.2%, combustion of gasoline in one cylinder releases 490 J of heat. Find the total mechanical power produced by all four cylinders, operating at 48 cycles/s, or 2880 rpm

Explain the pcl5 dissociates to give an equilibrium mixture : When 1.000 mol of pcl5 is introduced into a 5.000l container at 500k 78.50% of the pcl5 dissociates to give an equilibrium mixture of pcl5, pcl3, and cl2

Which option strategy would you pursue : Which option strategy would you pursue? Be specific, thus I want you to look up current options for Duke Power and tell me which option you would choose, why, and how much you would pay/receive.

What is the position of the resulting image : A convex mirror has a focal length of -20 cm. What is the position of the resulting image in cm if the image is upright and one-fourth the object size

User Account

All Pages