Stock of HLL is currently trading in the market at Rs.220. The price of the stock is expected to go up or down by 15% in the first half year and by 5% in the second half year. The return on the Government security being traded in the market for same maturity is 4% p.a. You are required to calculate the value of a one-year American put option on HLL’s stock with strike price of Rs.250
Stock of HLL is currently trading in the market at Rs.220. The price of the stock is expected to go up or down by 15% in the first half year and by 5% in the second half year. The return on the Government security being traded in the market for same maturity is 4% p.a. You are required to calculate the value of a one-year American put option on HLL’s stock with strike price of Rs.250
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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Stock of HLL is currently trading in the market at Rs.220. The price of the stock is expected to go up or down by 15% in the first half year and by 5% in the second half year. The return on the Government security being traded in the market for same maturity is 4% p.a.
You are required to calculate the value of a one-year American put option on HLL’s stock with strike price of Rs.250
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