1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
nydimaria [60]
3 years ago
8

The common stock of the C.A.L.L. Corporation has been trading in a narrow range around $125 per share for months, and you believ

e it is going to stay in that range for the next 6 months. The price of a 6-month put option with an exercise price of $125 is $10.50. a. If the risk-free interest rate is 5% per year, what must be the price of a 6-month call option on C.A.L.L. stock at an exercise price of $125 if it is at the money? (The stock pays no dividends.) (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Business
1 answer:
Bezzdna [24]3 years ago
3 0

Answer:

The price of a 6-month call option on C.A.L.L. stock is $13.52

Explanation:

According to the given data we have the following:

P = Price of 6-months put option=$10.50.

So = Current price=$125

X = Exrecise price=$125

r = Risk free interest rate= 5%

T = Time 6 months = 1/2

In order to calculate the price of a 6-month call option on C.A.L.L. stock at an exercise price of $125 if it is at the money, we would have to use the formula of put-call parity as follows:

C=P+So- (<u>   X   )</u>

              ( 1+r)∧T

C=$10.50+$125-(<u>$125   )</u>

                            (1+0.05)∧1/2

C=$135.5-121.98

C=$13.52

The price of a 6-month call option on C.A.L.L. stock is $13.52

You might be interested in
Which of the following examples describes how data science can improve<br> business outcomes?
Elis [28]

The data science can alter business resultants with the support of Analytics.

<h3>What is Analytics?</h3>

The systematized combinatorial investigation of the subject matter or applied mathematics is known as analytics.

It is a tool for determination, interpreting, and communicating crucial structures in data.

It also implies using data patterns to make more intelligent decisions. With the usage of analytics, data science may modify and better business outcomes.

Therefore, the Analytics can improve the business outcomes.

Learn more about the data science, refer to:

brainly.com/question/20815848

#SPJ1

3 0
1 year ago
EZBiz, the brainchild of three college friends, is a startup venture that plans to produce and market sports gear. The venture i
Elden [556K]

Answer:

B) The public is wary of sharing confidential information after a recent spate of credit card scandals.

Explanation:

There are several advantages of click-only companies, especially that they are able to offer lower prices since they don't need to support the costs of brick-and-mortar stores.

But the whole idea of selling through the internet is based on the customers' trust on new technologies and they specially dislike when the new technologies fail, e.g. when a hacker discloses the accounts and passwords of millions of users.

4 0
3 years ago
"An individual is unique and does not speak for or represent anything other than themselves." This statement is an argument agai
aivan3 [116]
I think it’s c , i might be wrong tho lol
3 0
3 years ago
- 3.1.6 Quiz: Strategic Relationships
Cloud [144]

Answer:

gorillas is very cracazuri am rllmmm

8 0
2 years ago
Read 2 more answers
Following are interest rates (annual percentage rates) for a 30-year-fixed-rate mortgage from a sample of lenders in a certain c
aalyn [17]

Hey There!:

Sample Mean = 4.4823

SD = 0.1859

Sample Size (n) = 7

Standard Error (SE) = SD/root(n) = 0.0703

alpha (a) = 1-0.99 = 0.01

t(a/2, n-1 ) =  3.7074

Margin of Error (ME) =  t(a/2,n-1)x SE = 0.2606

99% confidence interval is given by:

Sample Mean +/- (Margin of Error)

4.4823 +/- 0.2606 = (4.222 , 4.743)

Hope this helps!

5 0
3 years ago
Other questions:
  • Daniel, the supervisor of a team of financial analysts, aims to become a manager. He is confident about his ideas in the workpla
    7·1 answer
  • It costs a company $30,000 to produce 600 heart rate monitors. The company’s cost will be $30,070 if it produces an additional h
    7·1 answer
  • Nine subjects, 87 to 96 years old, were given 8 weeks of progressive resistance weight training. strength before and after train
    12·1 answer
  • A perfectly competitive market helps ensure that the products produced are the goods that consumers want. this demonstrates the
    6·1 answer
  • A company pays $1,900 for supplies previously purchased on account. Indicate the amount of increases and decreases in the accoun
    12·1 answer
  • In the context of investing, the term market refers to Select one:
    12·2 answers
  • Monty loaned his friend Ned $20,000 three years ago. Ned signed a note and made payments on the loan. Last year, when the remain
    12·1 answer
  • You want to purchase a motorcycle 4 years from now, and you plan to save $3,500 per year, beginning immediately. You will make 4
    5·1 answer
  • HELP ASAP! GIVING BRAINLIEST! PLS CORRECT ANSWER
    8·1 answer
  • Shandra Corporation (a U.S.-based company) expects to order goods from a foreign supplier at a price of 131,000 pounds, with del
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!