Please correct answer and don't used hand raiting and don't used Ai solution 15-Today's price of Apple (AAPL) is $150 per share. AAPL does not pay dividends. One yearfrom today, there are two possible states. In the u state, the economy is booming and theprice of AAPL is $225. In the d state, the economy is suffering and the price of AAPL is $75. Thec.c. risk-free interest rate is one percent. You are interested in a European call option on AAPLwith a strike of $150 and a maturity of one year. Assume there is no arbitrage. What is theprice of the call option? Round your answer to three decimal places.

Inputs RecapCurrent stock price (S0): $150Strike price (K): $150Stock price in upstate (Su):…

Answered: 15-Today's price of Apple (AAPL) is…

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter11: Managing Transaction Exposure

Section: Chapter Questions

Problem 57QA

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After a few years, Home’s net foreign asset position is -400. For simplicity, assume GDP is 1000 every year afterward, and the interest rate on international borrowing is kept at zero from now on. Suppose Home wants to maintain a current account surplus at 2% of GDP and gradually pay back the debt. How many years will it take for Home to pay back the debt fully? (Note that in 2014, U.S. net foreign asset position is about -40% of GDP as assumed here)
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