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Apple stock price is currently $ 4 2 . The exercise price of the call option six months from the expiration is $ 4 0

Apple stock price is currently $

42 .

The exercise price of the call option six months from the expiration is $

40,

the risk

-

free interest rate is

10 %

per annum, and the volatility is

25 %

per annum. Calculate call option premium based on the Black

-

Scholes

-

Merton Option Pricing Model.

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