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What are the prices of a call option and a put option with the following characteristics? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Stock price $74 Exercise price = $70 Risk-free rate= 4.40% per year, compounded continuously Maturity = 4 months Standard deviation Call price Put price = 62% per year

What are the prices of a call option and a put option with the following characteristics? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Stock price $74 Exercise price = $70 Risk-free rate= 4.40% per year, compounded continuously Maturity = 4 months Standard deviation Call price Put price = 62% per year

Essentials Of Investments
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
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**Call and Put Option Pricing** **Problem Statement:** Determine the prices of a call option and a put option based on the following characteristics. **Instructions:** Do not round intermediate calculations and round your answers to 2 decimal places (e.g., 32.16). - **Stock price** = $74 - **Exercise price** = $70 - **Risk-free rate** = 4.40% per year, compounded continuously - **Maturity** = 4 months - **Standard deviation** = 62% per year **Table for Calculation:** | Option Type | Price | |-------------|--------------| | Call price | ____________ | | Put price | ____________ |
Transcribed Image Text:**Call and Put Option Pricing** **Problem Statement:** Determine the prices of a call option and a put option based on the following characteristics. **Instructions:** Do not round intermediate calculations and round your answers to 2 decimal places (e.g., 32.16). - **Stock price** = $74 - **Exercise price** = $70 - **Risk-free rate** = 4.40% per year, compounded continuously - **Maturity** = 4 months - **Standard deviation** = 62% per year **Table for Calculation:** | Option Type | Price | |-------------|--------------| | Call price | ____________ | | Put price | ____________ |
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