Question 4: What is the lower bound for the price of a six-month European put option on a stock when the stock price is $50, the strike price is $55, the risk-free rate is 4% and there are no dividends?

Question 5: The price of a European call option on a non-dividend paying stock with a strike price of $60 is $8. The stock price is $62, the risk-free rate is 4% and the time to maturity is one year. What is the price of a one year European put option with a strike price of $60 on the same stock.

Question 6: A call and a put on a stock have the same strike price and maturity. At 10:00 am on a certain day, the price of the call is $3.50 and the price of the put is $4. At 10:01 am news reaches the market that has no effect on the stock price but increases its volatility. As a result the call price changes to $4.50. What is expected price of the put at 10:01 am?

Question 13: Consider a six month put option on a stock with a strike price of $30. The current stock price is $30 and over the next six months it is expected to rise to $34 or fall to $27. The risk-free interest rate is 4%. What is the risk-neutral probability of the stock rising to $34?

Question 15: Consider a six month put option on a stock with a strike price of $30. The current stock price is $30 and over the next six months it is expected to rise to $34 or fall to $27. The risk-free interest rate is 4%. What is the value of the put?

Complete the following questions in excel with explanations please

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Please see attached file

Question 4
What is the lower bound for the price of a six-month European put option on a stock when the stock price is $50, the strike price is $55, the risk-free rate is 4% and there are no dividends?

Answer: $3.91

S0= 50
X= 55
r= 4%
T= 6/12 years

Lower bound=
p >= Xe-rT - S0 = 3.91 =55*EXP(-4%*6/12)-50

Question 5
The price of a European call option on a non-dividend paying stock with a strike price of $60 is $8. The stock price is $62, the risk-free rate is 4% and the time to maturity is one year. What is the price of a one year European put option with a strike price of $60 on the same stock.

Answer: $3.65

We will use put-call parity condition ...

Solution Summary

Calculates the price of options, lower bound for the value of options, risk neutral probability etc.

Suppose that c1, c2 and c3 are the prices of European call options with strike prices X1, X2 and X3, respectively, where X3>X2>X1 and X3-X2=X2-X1. All options have the same maturity.
Show that C2 is less than or equal to 0.5(C1+C3)
(Hint: Consider a portfolio that is long one option with strike price X1, long one option w

See attached file for full problem description.
summary of options purchased at beginning of 4th quarter with 3 months to expiration (european style options)
position shares premium strike price
long calls 63,000 $20.45 $110
long puts 63,000 $13.15 $110
beginning end
4th Quarter 4th Quarter
underly

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Please help with the following finance-related problems.
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I'm trying to answer the questions about the two period binomial tree pasted here. Thanks for your help!!
Pricingoptions on binomial tree: Consider a two-period binomial example where the underlying asset's price movements are modeled over the next two months, each period corresponding to one month. The current level of the