A Futures Price Is Currently 40 Cents

question 6

Short Answer

A futures price is currently 40 cents. It is expected to move up to 44 cents or down to 34 cents in the next six months. The risk-free interest rate is 6% with continuous compounding.
i) What is the probability of an up movement in a risk-neutral world? _ _ _ _ _ _
ii) What is the value of a six-month put option with a strike price of 37 cents? Give two decimal places.) _ _ _ _ _ _
iii) What is the value of a six-month call with a strike price of 33 cents? Give two decimal places.) _ _ _ _ _ _

Identify the major body cavities and the organs they contain.

Understand the concept and application of anatomical directional terms.

Recognize and differentiate between specialized regions of the human body.

Grasp the basic concepts of human anatomy relevant to health and pathology.

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Definitions:

Price-Fixing

An illegal agreement among competitors to set prices at a certain level, rather than letting them be determined naturally by supply and demand.

Economic Efficiency

A state in which resources are allocated in a way that maximizes the production of goods and services at the lowest cost, while achieving the highest possible welfare or utility.

Negative Externalities

Costs experienced by third parties due to the actions of others that are not reflected in market prices.

Clayton Act

A U.S. antitrust law, adopted in 1914, aimed at protecting competition by prohibiting certain actions that lead to anticompetitiveness.