# Four Multiple Choice Finance Questions

1).9px;=”” 12px=””>Given the following option quote information:CallsPutsOption and NY CloseExpirationStrike PriceVolumeLastVolumeLastXYZFebruary112857.55400.60March112618.55221.55May1122210112.85August112312.534.70The current stock price is \$114.00 and the stock price on the expiration date is \$120.00. How much is your options investment worth? (ignore commissions).9px;=”” 12px=””>\$8,000.00.9px;=”” 12px=””>\$6,000.00.9px;=”” 12px=””>\$80.002)Given the following parameters use risk-neutral valuation to value a call option..9px;=”” 12px=””>Current stock price:\$85.00Stock will increase or decrease next year by:15 pct.Call Option strike price:\$82.00Time to expiration:1 yearRisk free rate:8 pct..9px;=”” 12px=””>Value of call: \$14.58.9px;=”” 12px=””>Value of call: \$11.18.9px;=”” 12px=””>Value of call: \$9.073) A bond has 4 years to maturity, a coupon of 3 percent paid annually and currently sells at par. What is the duration of the bond?.9px;=”” 12px=””>3.91 years.9px;=”” 12px=””>3.83 years.9px;=”” 12px=””>4.30 years4) Use Black Scholes to Value the put and call given the following criteria. The stock price six months from the expiration of an option is \$43.00, the exercise price of the option is \$39, the risk free interest rate is 10 percent per annum, and the volatility is 20% per annum. .9px;=”” 12px=””>c = 3.16, p = 1.06.9px;=”” 12px=””>c = 6.33, p = 0.43.9px;=”” 12px=””>c = 4.00, p = 1.90

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