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Gasworks, Incorporated, has been approached to sell up to 2 . 2 million gallons of gasoline in three months at a price of $ 2
Gasworks, Incorporated, has been approached to sell up to million gallons of gasoline in three months at a price of $ per gallon. Gasoline is currently selling on the wholesale market at $ per gallon and has a standard deviation of percent. If the riskfree rate is percent per year, what is the value of this option? Use the twostate model to value the real option. Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to decimal places, eg
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