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chap10

# 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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