Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. chipotle mexican grill, inc. common stock currentl

Chipotle Mexican Grill, Inc. common stock currently sells for $1,254.10 per share, and the standard...

70.2K

Verified Solution

Question

Finance

image

Chipotle Mexican Grill, Inc. common stock currently sells for $1,254.10 per share, and the standard deviation of returns is 55.00%. A call option with a strike price of $1,300 is currently trading on the market at $183.70 per call option. The option expires in six months, and the risk-free rate of return is 3.5%. Chipotle does not pay a dividend. Chipotle has a delta of 0.55844 and a gamma (T) of 0.00081. If Chipotle's stock price increases by $7, what will the new call price be using both delta and gamma to determine the change? $189.65 $183.85 oooo $187.63 $185.59

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