Maurice Tutor

(5)

$15/per page/Negotiable

About Maurice Tutor

Levels Tought:
Elementary,Middle School,High School,College,University,PHD

Expertise:
Algebra,Applied Sciences See all
Algebra,Applied Sciences,Biology,Calculus,Chemistry,Economics,English,Essay writing,Geography,Geology,Health & Medical,Physics,Science Hide all
Teaching Since: May 2017
Last Sign in: 398 Weeks Ago, 1 Day Ago
Questions Answered: 66690
Tutorials Posted: 66688

Education

  • MCS,PHD
    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

Experience

  • Professor
    Phoniex University
    Oct-2001 - Nov-2016

Category > Business & Finance Posted 12 May 2018 My Price 5.00

Biogen Idec

4-3)

You are looking at option prices on calls and puts and noticed that Biogen Idec (BIIB) is currently selling at $319.55. You look up the price of a call and a put with a strike price of $300 and maturing in 6 months. The price of the call is $40.80 and the put is $19.25. Assume BIIB does not pay a dividend. You also noticed the risk free rate is 2% per annum with continuous compounding for the next six months. If there is a mispricing, generate an arbitrage that will allow you to exploit this mispricing. What do you long and what do you short? How much money will you make by just entering into the arbitrage buying/selling one share of the securities you need to exploit the mispricing?

a. Assume these are European options.

b. Assume these are American options.

PLEASE ANSWER A & B and SHOW ALL WORK/EXPLAIN!

Thank you.

Answers

Maurice Tutor
(5)
Status NEW Posted 12 May 2018 05:05 PM My Price 5.00

Hel-----------lo -----------Sir-----------/Ma-----------dam-----------Tha-----------nk -----------You----------- fo-----------r u-----------sin-----------g o-----------ur -----------web-----------sit-----------e a-----------nd -----------acq-----------uis-----------iti-----------on -----------of -----------my -----------pos-----------ted----------- so-----------lut-----------ion-----------.Pl-----------eas-----------e p-----------ing----------- me----------- on-----------cha-----------t I----------- am----------- on-----------lin-----------e o-----------r i-----------nbo-----------x m-----------e a----------- me-----------ssa-----------ge -----------I w-----------ill----------- be-----------

Not Rated(0)