15. The share of Ashok Enterprises is currently selling for 100. It is known that the share...

Question:

15. The share of Ashok Enterprises is currently selling for 100. It is known that the share price will either turn to be 108 or 90. The risk-free rate of return is 12 per cent per annum. If you intend to buy a 3-month call option with an exercise price of 97, how much should you pay for buying the option today? Assume no arbitrage opportunity.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question
Question Posted: