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
liubo4ka [24]
3 years ago
15

The current price of a stock is $50, the annual risk-free rate is 6%, and a 1-year call option with a strike price of $55 sells

for $7.20. What is the value of a put option, assuming the same strike price and expiration date as for the call option? Select one: a. $7.33 b. $7.71 c. $8.12 d. $8.55 e. $9.00
Business
1 answer:
Vlad [161]3 years ago
6 0

Answer:

The value of the put option is;

e. $9.00

Explanation:

To determine the value of the put option can be expressed as;

C(t)-P(t)=S(t)-K.e^(-rt)

where;

C(t)=value of the call at time t

P(t)=value of the put at time t

S(t)=current price of the stock

K=strike price

r=annual risk free rate

t=duration of call option

In our case;

C(t)=$7.2

P(t)=unknown

S(t)=$50

K=$55

r=6%=6/100=0.06

t=1 year

replacing;

7.2-P=50-55×e^(-0.06×1)

7.2-P=50-(55×0.942)

7.2-P=50-51.797

P=51.797+7.2-50

P=$8.997 rounded off to 2 decimal places=$9.00

You might be interested in
Select the correct answer. Martha is a healer, a healthcare provider, and an experienced nurse. She wants to share her daily exp
Assoli18 [71]

Since Martha wants to share her daily thoughts and knowledge, while also letting other people have the chance to comment or ask questions to her about what she wrote, she should consider making a (E) blog.

A blog is <em>a form of online journal that is presented in chronological order.</em> The other options are unsuitable because it might be consider spamming if she posts only about her personal life (message board, wiki), and are not available to a wide circle of readers (email, chat).

5 0
3 years ago
Read 2 more answers
Following the fall of the Soviet Union, Russia saw a rise in political freedom and the economy implemented widespread price dere
d1i1m1o1n [39]

Answer:

Neoliberalism.

Explanation:

If the inequality is increased so the individual income would be represent as a neoliberalism cause also it would be applied in that case when the soviet union fall witness the disparities that lies between the rich and the power having gap widening also. It affects the individuals those already wealthy in order to earn and make more profits and give less for the population that is poor to catch up and decline back on track

6 0
2 years ago
Wanda has a new idea for a book, which she won't have time to start writing until next year. if she decides to discuss her idea
bagirrra123 [75]

Wanda has a new idea for a book, which she won't have time to start writing until next year. If she decides to discuss her idea with a film producer she knows, Wanda may protect it by means of <u>a Nondisclosure agreement.</u>

A Non-disclosure agreement (NDA) is a legal contract or part of a contract among at the least events that outlines private cloth, know-how, or facts that the events desire to proportion with each other for certain functions, but want to restriction get right of entry to to.

Doctor-patient confidentiality (medical doctor-patient privilege), attorney-customer privilege, priest-penitent privilege, and bank–patron confidentiality agreements are examples of NDAs, which can be often now not enshrined in a written agreement among the events.

It is a contract through which the parties agree now not to disclose any data covered with the aid of the agreement. An NDA creates an exclusive relationship between the events, generally to protect any sort of confidential and proprietary information or exchange secrets.

Learn more about Non-disclosure agreements here: brainly.com/question/19451955

#SPJ4

8 0
1 year ago
I had a account but now i cant get this app what do i do i cant even get a new account
Alborosie

Answer:

Yes you can of course you can

8 0
3 years ago
Read 2 more answers
Nicole deposits $2,136 in a savings account paying 5.36% interest. to the nearest dollar, how much money does nicole have in tot
Oduvanchick [21]
2,136×(1+0.0536×9)
=3,166
7 0
3 years ago
Read 2 more answers
Other questions:
  • ___ integrity tests indirectly estimate employee honesty by measuring psychological traits.
    10·1 answer
  • Consider the following restaurants: Pizza Hut, Popeyes, and Taco Bell. When conducting a review on any business, the first thing
    5·1 answer
  • What financial behaviors will typically lead to a low credit score?
    7·1 answer
  • In markets characterized by oligopoly,
    11·1 answer
  • Assume that salaried employees of Mayer, Inc., earn 2 weeks of vacation per year. The salaried employees earn a total of $160 ea
    10·2 answers
  • Which of the following is an example of a cost that varies in total as the number of units produced changes? a. property taxes o
    12·2 answers
  • Deitz Corporation is projecting a cash balance of $33,300 in its December 31, 2019, balance sheet. Deitz’s schedule of expected
    6·1 answer
  • What factors warrant special attention in appraising a firm’s inventory, equipment and accounts receivable?
    11·1 answer
  • What happens in the process represented by the pseudocode below?
    7·1 answer
  • Complete the following table by selecting the term that matches each definition on the left.
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!