Question
A stock is currently priced at $50. A call option with an expiration of 1 year has an exercise price of $55. The risk-free rate
A stock is currently priced at $50. A call option with an expiration of 1 year has an exercise price of $55. The risk-free rate is 5 percent per year, compounded continuously, and the standard deviation of the stocks return is infinitely large. What is the price of the call option?
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Fundamentals Of Futures And Options Markets
Authors: John C. Hull
7th Edition
0136103227, 9780136103226
