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The Current Stock Price of Alcoa Is $70 and the Stock

question 33

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The current stock price of Alcoa is $70 and the stock does not pay dividends.The instantaneous risk free rate of return is 6%.The instantaneous standard deviation of Alcoa's stock is 40%.You wish to purchase a call option on this stock with an exercise price of $75 and an expiration date 30 days from now.Based on the Black-Scholes OPM,the call option's delta will be __________.


Definitions:

Inventory Turnover Ratio

The inventory turnover ratio measures how many times a company's inventory is sold and replaced over a period.

Average Days

An accounting measure used to calculate the average number of days taken for a company to collect cash from its customers or pay its debts.

Dividend Yield Ratio

An economic ratio that illustrates the yearly dividend disbursement of a company as a percentage of its stock value.

Net Profit Margin

A financial ratio that shows the percentage of profit a company makes for each dollar of sales, after all expenses are deducted.

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