The Black-Scholes option pricing model (OPM) was developed in 1973. The creation of the Black-Scholes OPM played a significant role in the rapid growth of options trading.
Under the assumptions used by Fischer Black and Myron Scholes to derive the Black-Scholes model, if the option price is the price found using the Black-Scholes model, arbitrage opportunities will exist.
According to the Black—Scholes Option Pricing Model, if the current stock price, P, increases, the value of the call option will
Merry Melon Fruit Company has a current stock price of $20.00. A call option on this stock has an exercise price of $20.00 and 0.36 year to maturity. The variance of the stock price is 0.04, and the risk-free rate is 5%. You calculate d1 to be 0.21 and N(0.21) to be 0.5832. Therefore, d_2 will be 0.09 and N(0.09) will be 0.5359. Using the Black- Scholes option Pricing Model, what is the value of the option?
a. $1.137
b. $1.251
c. $1.308
d. $0.966
Answers: 2
Business, 22.06.2019 11:10, jordanbyrd33
Robert black, regional manager for ford in texas and oklahoma, faced a dilemma. the ford f-150 pickup truck was the best-selling pickup ever, yet ford's headquarters in detroit had decided to introduce a completely redesigned f-150. how could mr. black sell both trucks at the same time? he still had "old" f-150s in stock. in his advertising, mr. black referred to the new f-150s as follows: "not a better f-150. just the only truck good enough to be the next f-150." this statement represents ford's of the new f-150.
Answers: 2
Business, 22.06.2019 14:00, breana758
Bayside coatings company purchased waterproofing equipment on january 2, 20y4, for $190,000. the equipment was expected to have a useful life of four years and a residual value of $9,000. instructions: determine the amount of depreciation expense for the years ended december 31, 20y4, 20y5, 20y6, and 20y7, by (a) the straight-line method and (b) the double-declining-balance method. also determine the total depreciation expense for the four years by each method. depreciation expense year straight-line method double-declining-balance method 20y4 $ $ 20y5 20y6 20y7 total $
Answers: 3
Business, 22.06.2019 21:30, robert7248
Consider the following three bond quotes; a treasury note quoted at 87.25, and a corporate bond quoted at 102.42, and a municipal bond quoted at 101.45. if the treasury and corporate bonds have a par value of $1,000 and the municipal bond has a par value of $5,000, what is the price of these three bonds in dollars? multiple choice $872.50, $1,000, $1,000, respectively $1,000, $1,024.20, $1,001.45, respectively $872.50, $1,024.20, $5,072.50, respectively $1,000, $1,000, $1,000, respectively
Answers: 3
The Black-Scholes option pricing model (OPM) was developed in 1973. The creation of the Black-Schole...
Health, 29.05.2021 06:50
Mathematics, 29.05.2021 06:50
Mathematics, 29.05.2021 06:50
Mathematics, 29.05.2021 06:50
Chemistry, 29.05.2021 06:50
Mathematics, 29.05.2021 06:50
Mathematics, 29.05.2021 07:00
Mathematics, 29.05.2021 07:00