FINANCE-The current stock price is $114.00 and the stock price on the expiration date is $120.00

Question # 00117624 Posted By: solutionshere Updated on: 10/14/2015 12:22 PM Due on: 11/13/2015
Subject Business Topic General Business Tutorials:
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Hello! This is my first time requesting answers and I am a new user, so please let me know if theres anything more I can do to help these questions get answered. I need these four multiple choice finance questions answered tonight. Any help I could get would be great, thank you!


1)

Given the following option quote information:

Calls

Puts

Option and NY Close

Expiration

Strike Price

Volume

Last

Volume

Last

XYZ

February

112

85

7.55

40

0.60

March

112

61

8.55

22

1.55

May

112

22

10

11

2.85

August

112

3

12.5

3

4.70

The current stock price is $114.00 and the stock price on the expiration date is $120.00. How much is your options investment worth? (ignore commissions)


$8,000.00
$6,000.00
$80.00

2)

Given the following parameters use risk-neutral valuation to value a call option.

Current stock price:$85.00
Stock will increase or decrease next year by:15 pct.
Call Option strike price:$82.00
Time to expiration:1 year
Risk free rate:8 pct.

Value of call: $14.58
Value of call: $11.18
Value of call: $9.07

3) A bond has 4 years to maturity, a coupon of 3 percent paid annually and currently sells at par. What is the duration of the bond?
3.91 years
3.83 years
4.30 years


4) Use Black Scholes to Value the put and call given the following criteria. The stock price six months from the expiration of an option is $43.00, the exercise price of the option is $39, the risk free interest rate is 10 percent per annum, and the volatility is 20% per annum.
c = 3.16, p = 1.06
c = 6.33, p = 0.43
c = 4.00, p = 1.90

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  1. Tutorial # 00112098 Posted By: solutionshere Posted on: 10/14/2015 12:22 PM
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