The table below describes 4 newly issued options and lists their prices in the right-most col of the options expire in 1 year. The underlying asset for the options is Stock X. Type of option Barrier Strike Price Knock-in call 55 50 9.72 Knock-in call 80 50 8.92 Knock-out call 80 50 4.10 Knock-in put 55 50 2.18 Determine the price of a newly issued 1-year knock-out call on Stock X with a barrier of $55 and a strike of $50. O A) 1.12 O B) 3.30 O C) 7.54 O D) 10.84 O E) 14.54

The table below describes 4 newly issued options and lists their prices in the right-most col of the options expire in 1 year. The underlying asset for the options is Stock X. Type of option Barrier Strike Price Knock-in call 55 50 9.72 Knock-in call 80 50 8.92 Knock-out call 80 50 4.10 Knock-in put 55 50 2.18 Determine the price of a newly issued 1-year knock-out call on Stock X with a barrier of $55 and a strike of $50. O A) 1.12 O B) 3.30 O C) 7.54 O D) 10.84 O E) 14.54

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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7. Ahmed is strategizing to add option investment for short term on ABC stock that is currently trading at $35, the strike price is $40. With the interest rate of 3 percent and call option price of $2.45, what should be the put option price using put-call parity formula. A) $6.28 B) $2.85 C) unlimited D) $16.45 E) $9.70 my Show Transcribed Text
6 Call options with an exercise price of $50 and one year to expiration are available. The market price of the underlying stock is currently $42, but this market price is expected to either decrease to $52 or increase to $37 in a year's time. Assume the risk-free rate is 6%. What is the value of the option? (Do not round Intermediate calculations. Round the final answer to 2 decimal places. Omit any commes and the $ sign in your response. For example, an answer of $1,000.50 should be entered as 1000.50.) Numeric Response 2:26:13 W حن Search 96 15 園 16 17 5 CH IA ASUS 180/2 8 19 9 10 O 112 IA Bit St Amanat ENG US 6:03 PM 2024-07-09
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