A) What is the price of a $30 strike put? Assume S = $28.50, σ = 0.32, r = 0.04, the stock pays a 1.0% continuous dividend and the option expires in 110 days?
A) What is the price of a $30 strike put? Assume S = $28.50, σ = 0.32, r = 0.04, the stock pays a 1.0% continuous dividend and the option expires in 110 days?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A) What is the price of a $30 strike put? Assume S = $28.50, σ = 0.32, r = 0.04, the
stock pays a 1.0% continuous dividend and the option expires in 110 days?
B) What is the delta on a $20 strike call? Assume S = $22.00, σ = 0.30, r = 0.05, the stock
pays a 1.0% continuous dividend and the option expires in 80 days
C)How does a dividend payment impact the option price?
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