Assumethefollowingdatas3790r50035 a 250 b 276 c

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Unformatted text preview: ns on the stock have a A standard deviation of 32.0%. What is the forecasted price of the stock using 3-month periods at Suudu? A) 74.08 $ B) 94.24 $ C) 100.17 $ D) 111.12 $ Answer: C 9) sing a binomial tree, what is the price of a $40 strike 6-month call option, using 3-month U intervals as the time period? Assume the following data: S = $37.90, r = 5.0%, σ = 0.35 A) 2.50 $ B) 2.76 $ C) 2.92 $ D) 3.08 $ Answer: D 10) sing a binomial tree, what is the price of a $40 strike 6-month put option, using 3-month U intervals as the time period? Assume the following data: S = $37.90, r = 5.0%, σ = 0.35 A) 3.52 $ B) 3.66 $ C) 3.84 $ D) 3.91 $ Answer: D 11) call option has an exercise price of $30. The stock price at a point on the binomial tree is A $36.24. The calculated present value of the option at that same point is $5.86. What figure should be used to calculate option prices at points moving toward the final price? A) 5.86 $ B) 6.24 $ C) 6.62 $ D) 7.01 $ Answer: B 2 12) n the case of a 1-year option, the current stock price is $52 per share. If the stock price has I an equal chance of ending the year at either $58 or $45, what is the △ given an interest rate...
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This document was uploaded on 10/30/2013.

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