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9. Suppose you download the adjusted daily prices for ABC and estimate the annual variance to be ABC = 0.1957. It's current price is $164.75.

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9. Suppose you download the adjusted daily prices for ABC and estimate the annual variance to be ABC = 0.1957. It's current price is $164.75. (a) Use the Black-Scholes formula to compute today's price of a call option for ABC with a strike price of Xi = $165 which expires in 30 days. Assume that the annual risk free rate is r=0.02, and use the value you computed for o. How does this price compare with the actual price of $4.10

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