question archive Claire calculates that shares of Huron Investments, currently trading at $72, will either increase to $144 or decrease to $36 in one year with a 50/50 probability
Claire calculates that shares of Huron Investments, currently trading at $72, will either increase to $144 or decrease to $36 in one year with a 50/50 probability
Subject:FinancePrice: Bought3
Claire calculates that shares of Huron Investments, currently trading at $72, will either increase to $144 or decrease to $36 in one year with a 50/50 probability.
Claire is considering a one year $90.00 call option. The simple interest rate is 8.875%.
The price per share of leveraged stock is $___?___
The hedge ratio is 1/?
The price of the call option should be $___?___ per share.
