Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. b. a stock is trading at a price of $50 and has be

b. A stock is trading at a price of $50 and has beta 1.5. A...

50.1K

Verified Solution

Question

Finance

image

b. A stock is trading at a price of $50 and has beta 1.5. A call option can be replicated, over a very short period of time, by a portfolio consisting of 0.6 shares of the stock (this is the delta of the call) and a risk-free loan of $20. What is the beta of the call option? (9 marks)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Geometry
1.2K views

WXYZ is a square If WT 6 find each measure ZX XY m WTZ perimeter...

Chemistry
1.2K views

Part A A volume of 105 mL of H2O is initially at room temperature (22.00 ∘C). A...

Chemistry
1.2K views

Ionization is removal of an electron from the ground state [lowest possible value of n] completely...

Psychology
1.2K views

Being Peace: \"The Heart of Practice\" & \"Working for Peace\" Is peace an attainable goal, personally, locally,...

Physics
1.2K views

Medical Coding and Billing In a word document write (600 - 900 Words) Using APA Referencing style,...

Physics
1.2K views

Two singly ionized atoms move into a magnetic fields of magnitude 0.100 T pointing into the...

Biology
1.2K views

77 Polygamists believe that monogamy is not a natural state for human beings They feel...

Physics
1.2K views

speed in km s with which it hits the surface of the earth A bullet...

Basic Math
1.2K views

The measure A, in degrees, of an exterior angle of a regular polygon is related...

Algebra
1.2K views

The sum of two consecutive integers is 1 Find the two integers Answer

Accounting
1.2K views

Does the subsidiary record anything when a parent engages in a spin-off transaction?

Finance
1.2K views

NPV IRR and MIRR payback Discounted payback PL prosect are mutually exclusive -8% which one...