Boeing plans to give American airlines an option to buy wide-body 9W9 aircraft at the end of three years for $200 million, and the price of 9W9 aircraft today is $180 million. The life of the aircraft is 20 years. Boeing's business consists of 50% in commercial aircraft and 50% in defense projects. The volatility for Boeing stock is 30% per year. Airbus is 100% in the commercial aircraft business. The volatility for Airbus stock is 50% per year. The 3-year risk-free rate is 2% per year, and the twenty-year rat is 3% per year. What inputs will you use for the Black-Scholes model to estimate the price of the option given by Boeing?

A. Input column A B. Input column B C. Input column C D. Input column D

Note: The existing answer on Chegg is incorrect.

Column Option Stock price ($) Exercise price (S) Volatility (%) Risk-free rate Maturity (Years) A Call 200 180 30 2 3 B Call 180 200 30 2 20 Call 200 180 50 3 20 D Call 180 200 50 2 3 3 Column Option Stock price ($) Exercise price (S) Volatility (%) Risk-free rate Maturity (Years) A Call 200 180 30 2 3 B Call 180 200 30 2 20 Call 200 180 50 3 20 D Call 180 200 50 2 3 3