Question
A non-dividend paying stock priced at 50 can go up or down by 10 percent each period over two total periods. The risk-free rate is
A non-dividend paying stock priced at 50 can go up or down by 10 percent each period over two total periods. The risk-free rate is 4 percent per period. Which of the following is the correct price of a European call with an exercise price of 48?
Answer is 6.25 but I keep getting something around 5 when I do it.
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Health Care Finance Basic Tools For Nonfinancial Managers
Authors: Judith J. Baker, R.W. Baker, Neil R. Dworkin
5th Edition
1284118215, 978-1284118216
