Business, 18.06.2020 06:57 JeroMii

The common stock of the P. U.T. T. Corporation has been trading in a narrow price range for the past month, and you are convinced it is going to break far out of that range in the next 3 months. You do not know whether it will go up or down, however. The current price of the stock is $120 per share, and the price of a 3-month call option at an exercise price of $120 is $8.89. a. If the risk-free interest rate is 8% per year, what must be the price of a 3-month put option on P. U.T. T. stock at an exercise price of $120? (The stock pays no dividends.) (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. A straddle would be a simple options strategy to exploit your conviction about the stock price’s future movements. How far would it have to move in either direction for you to make a profit on your initial investment? (Round your intermediate calculations and final answer to 2 decimal places.)

Answers: 2

Show answers

Other questions on the subject: Business

Business, 22.06.2019 00:40, tenleywood

The silverside company is considering investing in two alternative projects: project 1 project 2 investment $500,000 $240,000 useful life (years) 8 7 estimated annual net cash inflows for useful life $120,000 $40,000 residual value $32,000 $10,000 depreciation method straightminusline straightminusline required rate of return 11% 8% what is the accounting rate of return for project 2? (round any intermediary calculations to the nearest dollar, and round your final answer to the nearest hundredth of a percent, x. xx%.)

Answers: 3

continue

Business, 23.06.2019 09:00, danielahchf

Jorge is attending college next year. he just got information on the college costs and the financial aid package the college is offering. jorge knows his parents can contribute $4,500 each year. jorge’s college costs & financial aid package per year costs financial aid package tuition & fees grants & scholarship $26,000 $18,500 room & board work-study $12,500 $8,500 how much will jorge need to pay each year from his own savings and from loans? $3,000 $7,000 $7,500 $11,500

Answers: 2

continue

Business, 23.06.2019 23:00, mfar4087

Firefighters is a company that manufactures smoke detectors. it runs a newspaper advertisement that reminds people of the need to have a smoke detector on every floor of their house. in the advertisement, the company also asks people to think about this the next time they're in the smoke detector section of a hardware store. according to the information provided here, this is an example of

Answers: 3

continue

Business, 23.06.2019 23:00, theyenvylexii

Central construction company (ccc) begins building a restaurant for diners' cafe corporation, but after two months demands an extra $100,000. diners' agrees to pay. if ccc offers, as a reason for the extra $100,000, that ordinary business expenses have increased, the agreement is

Answers: 3

continue

You know the right answer?

The common stock of the P. U.T. T. Corporation has been trading in a narrow price range for the past...