Consider a six month put option on a stock with a strike, Finance Basics

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Consider a six month put option on a stock with a strike

Consider a six month put option on a stock with a strike price of $32. The current stock price is $30 and over the next six months it is expected to rise to $36 or fall to $27. The risk free rate is 6%.

a)What is the risk neutral probability p?

b)What is the hedge ratio of the put option?

Show work please

c)What is the put price?

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Finance Basics: Consider a six month put option on a stock with a strike

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Finance Basics: Consider a six month put option on a stock with a strike

Reference No:- TGS0605756

Have a Question? (oR Write a Review)

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Finance Basics: Consider a six month put option on a stock with a strike

Reference No:- TGS0605756

Recent Questions Asked Finance Basics

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