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You purchase a call option for $10.74 with 24 months to expiration on a stock you expect to increase in value.0.00% The strike price of the option is $42.50 The stock is currently priced at $42.50. Its standard deviation is 38.00% It pays a 0.00% dividend. The risk-free rate is 5.00% If the stock is exactly where it is today, Le. SO-ST, 12 months from now, what is the change in option value as a percent (or decimal)? Use these values as a part of your calc's: N(d1) 0.62611 N(12) 0.47671

You purchase a call option for $10.74 with 24 months to expiration on a stock you expect to increase in value.0.00% The strike price of the option is $42.50 The stock is currently priced at $42.50. Its standard deviation is 38.00% It pays a 0.00% dividend. The risk-free rate is 5.00% If the stock is exactly where it is today, Le. SO-ST, 12 months from now, what is the change in option value as a percent (or decimal)? Use these values as a part of your calc's: N(d1) 0.62611 N(12) 0.47671

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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You purchase a call option for $10.74 with 24 months to expiration on a stock you expect to increase in value.0.00% The strike price of the option is $42.50 The stock is currently priced at $42.50. Its standard deviation is 38.00% It pays a 0.00% dividend. The risk-free rate is 5.00% If the stock is exactly where it is today, i.e. SOST, 12 months from now, what is the change in option value as a percent (or decimal)? Use these values as a part of your calc's: N(d1) 0.62611 N(D2) 0.47671 O-28.37% -30.14% -27.48% O-25.58% O-31.66%
Transcribed Image Text:You purchase a call option for $10.74 with 24 months to expiration on a stock you expect to increase in value.0.00% The strike price of the option is $42.50 The stock is currently priced at $42.50. Its standard deviation is 38.00% It pays a 0.00% dividend. The risk-free rate is 5.00% If the stock is exactly where it is today, i.e. SOST, 12 months from now, what is the change in option value as a percent (or decimal)? Use these values as a part of your calc's: N(d1) 0.62611 N(D2) 0.47671 O-28.37% -30.14% -27.48% O-25.58% O-31.66%
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