A call option on Bedrock Boulders stock has a market price of $7. The stock sells for $30 a share and the option has an exercise price of $25 a share.
a. What is the exercise value of the call option?
b. What is the premium on the option?
Assume that you have been given the following information on Purcell Industries.
Current Stock price=$15 Strike price of option =$15
Time to maturity of option =6 mos Risk-free rate =6%
Variance of stock return=0.12
d1 = 0.24495 N(d1) =0.59675
d2 = 0.00000 N(d2)= 0.50000
According to the Black-Scholes option pricing model, what is the options' value?
The current price of a stock is $33, and the annual risk-free rate is 6%. A call option with an exercise price of $32 and one-year until expiration has a current value of $6.56.
What is the value of a put option written on the stock with the same exercise price and expiration date as the call option?
The current price of a stock is $20 . In 1 year, the price will be either $26 or $16. The annual risk -free rate is 5%. Find the price of a call option on the stock that has a strike price of $21 and that expires in 1 year. (Hint: Use daily compounding.)