Finance Investment

| November 23, 2015

1) Consider the information about a stock and its call options A B C D Months to exercise 6 6 6 9 Risk-free rate 12% 12% 12% 12% Standard deviation of stock returns 40% 40% 40% 40% Current stock price $65 $65 $65 $65 Exercise price $60 $62 $59 $59 Expected cash dividend No No No No a) a) Without calculating the option prices, which call premium should be higher? (1) A versus B (2) A versus C (3) C versus D b) Calculate the Black-Scholes value for call A c) What should be the value of the put with terms identical to those of A? d) Develop an investment strategy for the following case: The pending contract award by the government may cause stock A to advance or decline sharply within the next 4 months (hint: 3 answer – A compare to B, A compare to C, A compare to D)

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Abstract Algebra
I to 3 sources needed. Analysis of a live performance musical "murder for two"

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