Purchase Solution

At the money call option

Not what you're looking for?

Ask Custom Question

1) AKX stock is currently trading at $50 today and in one period will either be worth 20% more or 20% less. The risk-free rate is 4%. What is the value of an at the money call option?

A. $5.77
B. $6.00
C. $6.67
D. $10.00
E. $20.00

Purchase this Solution

Solution Summary

The solution explains how to calculate the value of a at the money call option

Solution Preview

The value in one period could be either 50X1.2 = 60 of 50X0.8 = ...

Purchase this Solution


Free BrainMass Quizzes
Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

Lean your Process

This quiz will help you understand the basic concepts of Lean.

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

Business Processes

This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.