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bachelor in business administration
Polytechnic State University Sanluis
Jan-2006 - Nov-2010
CPA
Polytechnic State University
Jan-2012 - Nov-2016
Professor
Harvard Square Academy (HS2)
Mar-2012 - Present
A stock selling for $25 today will, in 1 year, be worth either $35 or $20. If the interest rate is 8%, what is the value today of a one-year call option on the stock with exercise price $30? Use the simultaneous equation approach of section 16.2 to price the option.
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The----------- st-----------ock----------- is----------- se-----------lli-----------ng -----------for----------- $2-----------5 a-----------nd -----------the----------- st-----------ock----------- wo-----------uld----------- go----------- up----------- ei-----------the-----------r b-----------y 4-----------0% -----------or -----------dow-----------n b-----------y 2-----------0%.----------- Th-----------e i-----------nte-----------res-----------t r-----------ate----------- is----------- 8%----------- an-----------d t-----------he -----------str-----------ike----------- pr-----------ice----------- is----------- $3-----------0. -----------If -----------the----------- st-----------ock-----------