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    Finance Questions

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    Dear OTA,

    Please solve Problems 9-2 ,9-3 , 9-4 and 13-1.

    Thanks

    © BrainMass Inc. brainmass.com June 3, 2020, 9:15 pm ad1c9bdddf
    https://brainmass.com/business/black-scholes-model/finance-questions-173344

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    9-2. Option's strike price = $15; Exercise value = $22; Time value = $5;
    Time Value = Market price of option (V) - Exercise value
    $5 = V - $22
    V = $27.
    Exercise value = Price of the stock (P0) - Strike price
    $22 = P0 - $15
    P0 = $37
    9-3. P = $15; X = $15; t = 0.5(in years = 6months) ; rRF( risk free rate) = 0.06; σ2 (variance)= 0.12; d1 = ...

    Solution Summary

    The posting answers four questions - 1. Flanagan Company - price of stock 2. Purcell Industries - value of option 3. Value of put option 4. Kim Hotels - net present value and decision tree analysis

    $2.19

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