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Duestion 10 (10 points) ELEM Corporation's took price is currently trading at $85. The investor is considering of buying the 6 month straddle with exercise
Duestion 10 (10 points) ELEM Corporation's took price is currently trading at $85. The investor is considering of buying the 6 month straddle with exercise price of 305. The risk-free rate is 35% the Standard Deviation is 0.25. The stock pays dividend at the end of the first period at the rate of 3% Calourate both the Call, the Put and the Straddle options premiums using the Black Scholes Option Pricing Model ANSVERS d1 = d2 = N(81) = N[d2) = Call Premium = Put Premium = Straddle Pren. = Sheet1
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