The current price of a non-dividend-paying stock is $62.07 and you expect the stock price to either go up by a factor of 1.153 or down by a factor of 0.881 each period for 2 periods over the next 0.4 years. Each period is 0.2 years long. A European put option on the stock expires in 0.4 years. Its strike price is $62. The risk-free rate is 4% (annual, continuously compounded). What is the option payoff in 0.4 years if the stock price has gone down twice in a row? Report your answer in two decimal places

This diagram shows the steps in mitosis, with labels to reference in the questions below. The phase of mitosis in which the chromosomes condense and centrosomes move to opposite poles of the cell is

You wrote (sold) a put contract with a strike price of $50 and an expiration date in 6 months. The current stock price is $48 and the contract is for 100 shares. What does writing the put option imply?

The current price of a stock is $295 and the annual standard deviation of the rate of return on the stock is 40%. The stock is expected to pay dividends of $1.12 in 1 months and $1.12 in 4 months. A European call option on the stock has a strike price of $280 and expires in 0.5 years. The risk-free rate is 4% (continuously compounded). What is the value of N(d1) in the Black-Scholes formula? Use Excel’s NORM.S.DIST(d1, true) function.? Report your answer in four decimal places

Consider call options on the same stock with the same maturity date. You bought two call options with strike prices of $54 and $90 for $6.09 and $1.69, respectively, and sold two call options with a strike price of $72 for $2.93 each.  What is your profit if the stock price is $63 on the expiration date? Report your answer in two decimal places

The current price of a non-dividend-paying stock is $13.49 and you expect the stock price to either go up by a factor of 1.363 or down by a factor of 0.734 over the next 0.6 years. A European call option on the stock expires in 0.6 years. Its strike price is $13. The risk-free rate is 2% (annual, continuously compounded). What is the value of the option? Report your answer in 3 decimal places

The current price of a stock is $518. The stock is expected to pay dividends of $1.83 in 2 months and $1.83 in 5 months.  A European call option on the stock costs $18. It has a strike price of $540 and expires in 0.5 years. The risk-free rate is 6% (continuously compounded). What should be the price of the put option with the same strike price and expiration date? Show your answer in two decimal places

The difference between a European and an American option is that the European option

A put option on a stock with a current price of $100 has a strike price of $114 and currently sells for $16.39. What is the time value of the option?

The current level of a broad stock market index is 1,474. Its dividend yield is 3% and the standard deviation of index returns is 20%. An American put option on the stock expires in 0.4 years. Its strike price is $1,480. The risk-free rate is 7% (annual, continuously compounded). Value the option using a binomial model with 2 periods of length 0.2 years each. What is the value of the option in 0.2 years if the stock price has gone down once? Report your answer in two decimal places