The current price of a non-dividend-paying biotech stock is $140 with a volatility of 25%. The risk-free rate is 4%. For a three-month time step:
a) What is the percentage up movement?
b) What is the percentage down movement?
c) What is the probability of an up movement in a risk-neutral world?
d) What is the probability of a down movement in a risk-neutral world?
Use a two-step tree to value a six-month European call option and a six-month European put option. In both cases the strike price is $150.
Answers: 2
Another question on Business
Business, 21.06.2019 17:40
Assume the government imposes a $2.25 tax on suppliers, which results in a shift of the supply curve from s1 to s2. the price the seller receives for the product after paying the tax is
Answers: 2
Business, 22.06.2019 06:00
Suppose that a monopolistically competitive restaurant is currently serving 260 meals per day (the output where mr
Answers: 2
Business, 22.06.2019 15:00
Which of the following is least likely to a team solve problems together
Answers: 1
Business, 22.06.2019 20:00
Richard is one of the leading college basketball players in the state of florida. he also maintains a good academic record. looking at his talent and potential, furman university offers to bear the expenses for his college education.
Answers: 3
You know the right answer?
The current price of a non-dividend-paying biotech stock is $140 with a volatility of 25%. The risk-...
Questions
History, 18.11.2019 00:31
Biology, 18.11.2019 00:31
English, 18.11.2019 00:31
Mathematics, 18.11.2019 00:31
Mathematics, 18.11.2019 00:31
English, 18.11.2019 00:31
