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Other things held constant, the value of an option depends on the stock's price, the risk-free rate, and theAnswer a. Strike price.b. Variability of the stock price.c. Option's time to maturity.d. All of the above.e. None of the above.4 points Suppose you believe that Johnson Company's stock price is going to increase from its current level of $22.50 sometime during the next 5 months. For $310.25 you can buy a 5-month call option giving you the right to buy 100 shares at a price of $25 per share. If you buy this option for $310.25 and Johnson's stock price actually rises to $45, what would your pre-tax net profit be?Answer a. -$310.25b. $1,689.75c. $1,774.24d. $1,862.95e. $1,956.10The current price of a stock is $50, the annual risk-free rate is 6%, and a 1-year call option with a strike price of $55 sells for $7.20. What is the value of a put option, assuming the same strike price and expiration date as for the call option?Answer a. $7.33b. $7.71c. $8.12d. $8.55e. $9.00An analyst wants to use the Black-Scholes model to value call options on the stock of Ledbetter Inc. based on the following data:The price of the stock is $40.The strike price of the option is $40.The option matures in 3 months (t = 0.25).The standard deviation of the stock’s returns is 0.40, and the variance is 0.16.The risk-free rate is 6%.Given this information, the analyst then calculated the following necessary components of the Black-Scholes model:d1 = 0.175d2 = -0.025N(d1) = 0.56946N(d2) = 0.49003N(d1) and N(d2) represent areas under a standard normal distribution function. Using the Black-Scholes model, what is the value of the call option?Answer a. $2.81b. $3.12c. $3.47d. $3.82e. $4.20
Do you know how much longer before these will be answered I have 30 minutes to finish.
Ok thank you can you then just send what you have in 30 minutes its a timed assignment.