A stock is currently selling for $56 a share. The risk-free rate is 3 percent and the standard deviation is 18 percent. What is the value of d1 of a 9-month call option with a strike price of $57.50?
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65.
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A stock is currently selling for $36 a share. The risk-free rate is 3.8 percent and the standard deviation is 27 percent. What is the value of d1 of a 9-month call option with a strike price of $40?
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66.
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The delta of a call option on a firm's assets is 0.767. This means that a $75,000 project will increase the value of equity by:
Increase in equity value = $75,000 × 0.767 = $57,525
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67.
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The delta of a call option on a firm's assets is 0.727. This means that a $195,000 project will increase the value of equity by:
Increase in equity value = $195,000 × 0.727 = $141,765
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