subject
Business, 11.11.2019 18:31 trapqueenriz12

You are attempting to value a call option with an exercise price of $130 and one year to expiration. the underlying stock pays no dividends, its current price is $130, and you believe it has a 50% chance of increasing to $155 and a 50% chance of decreasing to $105. the risk-free rate of interest is 8%. based upon your assumptions, calculate your estimate of the the call option's value using the two-state stock price model.

ansver
Answers: 3

Another question on Business

question
Business, 22.06.2019 13:10
Lin corporation has a single product whose selling price is $136 per unit and whose variable expense is $68 per unit. the company’s monthly fixed expense is $32,400. required: 1. calculate the unit sales needed to attain a target profit of $5,000. (do not round intermediate calculations.) 2. calculate the dollar sales needed to attain a target profit of $8,400.
Answers: 3
question
Business, 22.06.2019 21:00
Which of the following statements is correct? stockholders should generally be happier than bondholders to have managers invest in risky projects with high potential returns as opposed to safe projects with lower expected returns. potential conflicts between stockholders and bondholders are increased if a firm's bonds are convertible into its common stock. takeovers are most likely to be attempted if the target firm’s stock price is above its intrinsic value. one advantage of operating a business as a corporation is that stockholders can deduct their pro rata share of the taxes the firm pays, thereby eliminating the double taxation investors would face in a partnership.
Answers: 1
question
Business, 22.06.2019 23:00
Investors who put their own money into a startup are known as a. mannequins b. obligators c. angels d. borrowers
Answers: 1
question
Business, 22.06.2019 23:10
Which investment has the liquidity and can be converted into cash easily?
Answers: 2
You know the right answer?
You are attempting to value a call option with an exercise price of $130 and one year to expiration....
Questions
question
Physics, 20.11.2020 14:00
question
Biology, 20.11.2020 14:00
Questions on the website: 13722367