A stock price is currently 30 it is known that at the end, Ask an Expert

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A stock price is currently $ 30. It is known that at the end of one month it will be either $ 32 or $ 28. The risk-free interest rate is 8%. You write a one-month call option with a strike price of 29$.

a) In a risk-neutral world what is the probability of a price moving up? down?

b) What is the value of a one-month European call option with a strike price of $ 29?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92173710

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