You observe a premium of $38.00 for a call option on Birdwell Enterprises common stock, which is currently selling for $38. The strike price on the call option is $35. The option has four months to maturity. The stock pays no dividends. The current risk-free interest rate is 4.50%. What is the implied volatility of the stock? (Round your answer to the nearest whole percent.) Implied volatility

You observe a premium of $38.00 for a call option on Birdwell Enterprises common stock, which is currently selling for $38. The strike price on the call option is $35. The option has four months to maturity. The stock pays no dividends. The current risk-free interest rate is 4.50%. What is the implied volatility of the stock? (Round your answer to the nearest whole percent.) Implied volatility

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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4. For a 4-month European call option on a stock you are given: (i) The stock's price is 52. (ii) The strike price is 60. (iii) The stock pays no dividends. (iv) The stock's annual volatility is 25%. (v) The continuously compounded risk-free interest rate is 5%. Determine the Black-Scholes formula for the option pricing.
Calculating Net Float Each business day, on average, a company writes checks totaling $13,200 to pay its suppliers. The usual clearing time for the checks is four days.Meanwhile, the company is receiving payments from its customers each day, in the form of checks, totaling $23,800. The cash from the payments is available to the firm after two days.a. Calculate the company’s disbursement float, collection float, and net float.b. How would your answer to part (a) change if the collected funds were available in one day instead of two?
The stock of Lead Zeppelin, a metal manufacturer, currently sells for $69 and has an annual standard deviation of 42 percent. The risk- free rate is 3.1 percent. What is the value of a put option with a strike price of $70 and 51 days to expiration? (Use 365 days in a year. Do not round intermediate calculations. Round your answer to 2 decimal places.) Value of a put option
The current price of MMX Corporation stock is $10. In each of the next two years, this stock price can either go up by $3.00 or go down by $2.00. MMX stock pays no dividends. The one-year risk-free interest rate is 5% and will remain constant. Using the binomial pricing model, calculate the price of a two-year call option on MMX stock with a strike price of $9. PLease answer with solution
The current price of a stock is $34, and the annual risk - free rate is 3 %. A call option with a strike price of $32 and with 1 year until expiration has a current value of $5.54. What is the value of a put option written on the stock with the same exercise price and expiration date as the call option? Do not round intermediate calculations. Round your answer to the nearest cent. Please answer fast i give you upvote.
A.K. Scott’s stock is selling for $37 a share. A 3-month call on this stock with a strike price of $38 is priced at $2. Risk-free assets are currently returning 0.28 percent per month. a) What should be the price of a 3-month put option on this stock with a strike price of $38? b) Which of the two options is currently in the money and does that accord with your conclusions about their relative prices?
can someone help me with this please and no excel
A stock trades for $45 per share. A call option on that stock has a strike price of $55 and an expiration date twelve months in the future. The volatility of the stock's returns is 44%, and the risk-free rate is 5%. What is the Black and Scholes value of this option? The Black and Scholes value of this call option is $ (Round to the nearest cent.)
IBM stock currently sells for 64 dollars per share. The implied volatility equals 40.0. The risk - free rate of interest is 5.5 percent continuously compounded. What is the delta of a call option with strike price 69 and maturity 9 months? Group of answer choices 0.4702 0.0751 0.5319 0.2574
You are considering the purchase of 100 units of a 3-month 25 - strike European call option on a stock. You are given: (i) The Black - Scholes framework holds. (ii) The stock is currently selling for 20. (iii) The stocks volatility is 24%. (iv) The stock pays dividends continuously at a rate proportional to its price. The dividend yield is 3%. (v) The continuously compounded risk-free interest rate is 5%. Calculate the price of the block of 100 options.
A call option currently sells for $7.00. It has a strike price of $40 and five months to maturity. A put with the same strike and expiration date sells for $5.00. If the risk-free interest rate is 5 percent, what is the current stock price? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Current stock price
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