HSBC stock trades at 475.8 (Pound sterling) per share. A call option on the stock has a

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HSBC stock trades at £475.8 (Pound sterling) per share. A call option on the stock has a strike price of £490 and an expiration date of six months. The volatility of the stock’s return has been 26% in the last year, and the risk-free rate is 1.5%. Calculate the value of the option using the Black and Scholes formula.

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Fundamentals Of Investing

ISBN: 9780135175217

14th Edition

Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk

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