I M Not Greedy has been granted options on 50000 shares The stock is currently

I m not greedy has been granted options on 50000

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29.I. M. Not. Greedy has been granted options on 50,000 shares. The stock is currently trading at $17 a share and the options are at the money. The volatility of the stock returns averages 16 percent. The options mature in 2 years and the risk-free rate is 3.45 percent. N(d1) is .662055 and N(d2) is .576052. Given this information, what is the value of a call option on one share of this stock? A. $2.11B. $1.70C. $1.89D. $2.28E. $2.21AACSB: Analytical ThinkingAccessibility: Keyboard NavigationBlooms: AnalyzeDifficulty: 2 IntermediateRoss - Chapter 23 #29Section: 23.2Topic: Black-Scholes option pricing model 30.Alpha stock is currently trading at $34.50 a share and the 6-month call options are at the money. The stock returns have a standard deviation of 21 percent and the risk-free rate is 4.21 percent. What is the price of the call option per share given that N(d1) is .585508 and N(d2) is .526913? AACSB: Analytical ThinkingAccessibility: Keyboard NavigationBlooms: AnalyzeDifficulty: 2 IntermediateRoss - Chapter 23 #30Section: 23.2 Topic: Black-Scholes option pricing model
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31.A stock has a market price of $25 and a standard deviation of returns of 24 percent. The $25 call option matures in 4 months and the risk-free rate is 2.89 percent. N(d1) is .555198 and N(d2) is .500096. What is the value of the call option per share of stock? AACSB: Analytical ThinkingAccessibility: Keyboard NavigationBlooms: AnalyzeDifficulty: 2 IntermediateRoss - Chapter 23 #31Section: 23.2Topic: Black-Scholes option pricing model 32.Jeff is analyzing an expansion project for a new business and has developed this input for a Black-Scholes model. Stock price = $7,365,000; Exercise price = $12,400,000; time period = 3 years; standard deviation = 14.5 percent, and the continuously compounded interest rate = 4.2 percent. What is the value of d1as it is used in the model? AACSB: Analytical ThinkingAccessibility: Keyboard NavigationBlooms: AnalyzeDifficulty: 2 IntermediateRoss - Chapter 23 #32Section: 23.2Topic: Black-Scholes option pricing model 33.Katrina is analyzing an expansion project for a new business and has developed this input for a Black-Scholes model. Stock price = $4,186,300; Exercise price = $7,250,000; time period = 4 years; standard deviation = 13.8 percent, and the continuously compounded interest rate = 3.84 percent. What is the value of d2as it is used in the model? A. .01338B. 1.2784C. 1.2953 D.–1.5713E. –1.0293AACSB: Analytical ThinkingAccessibility: Keyboard NavigationBlooms: AnalyzeDifficulty: 2 IntermediateRoss - Chapter 23 #33 Section: 23.2 Topic: Black-Scholes option pricing model
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