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VladimirAG [237]
4 years ago
10

When the non-dividend paying stock price is $20, the strike price is $20, the risk-free rate is 6%, the volatility is 20% and th

e time to maturity is 3 months, which of the following is the price of a European call option on the stock?
(Note: N(*) represent cumulative normal density function.)
a. 20*N(0.1) - 19.7*N(0.2)
b. 19.7*N(0.2) - 20N*(0.1)
c. 19.7*N(0.1) - 20N*(0.2)
d. 20N*(0.2) - 19.7N*(0.1)
Business
1 answer:
skelet666 [1.2K]4 years ago
3 0

Answer:

The correct option is d.20N(0.2)-19.7N*(0.1)

Explanation:

Given the following inputs:

Stock Price 20

Strike Price 20

Time to maturity: 0.25

Risk-free Rate 0.06

Dividend Yield 0

Annualized volatility 0.2

Cost of Carry 0.06

We get the following outputs:

d1=0.2

d2=0.1

N(d1)=0.57925971

N(d2)=0.53982784

Call=0.94937723

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When opening a checking or share draft account, which would likely be the most important consideration?
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Answer:

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The stability of the Union or bank in which you are opening your account.

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The interest rate. The easy access to my funds. The trackability of the transactions. The possible application for a credit in the future.

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The terms may vary from 1 day until 2160 days.

6 months – 6 years: Goldman Sachs Bank USA – 0.60% APY – 2.35% APY; $500 minimum deposit to open.

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When an Accounts Payable department improves their information system resulting in faster payments to vendors, without the Accou
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Answer:

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We are told to gauge the effect of increase in input (W) on quantity supplied (Qxs)

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