QuickHelper

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About QuickHelper

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Elementary,High School,College,University,PHD

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Accounting,Applied Sciences See all
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Teaching Since: May 2017
Last Sign in: 353 Weeks Ago
Questions Answered: 20103
Tutorials Posted: 20155

Education

  • MBA, PHD
    Phoniex
    Jul-2007 - Jun-2012

Experience

  • Corportae Manager
    ChevronTexaco Corporation
    Feb-2009 - Nov-2016

Category > Business & Finance Posted 30 May 2017 My Price 8.00

stock price

Question description

 

 

Consider a two-period, two-state world. Let the current stock price be $35 and the risk-free rate be 5%. In each period, the stock price can either go up by 10% or down by 10%. A call option expiring at the end of the second period has an exercise price of $30.

  1. Find the stock price sequence.
  2. Determine the possible prices of the call at expiration.
  3. Find the possible prices of the call at the end of the first period.
  4. What is the current price of the call?
  5. What is the initial hedge ratio?

Answers

QuickHelper
(10)
Status NEW Posted 30 May 2017 06:05 PM My Price 8.00

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