Hi Kamal - I have a new question that I would like to ask you directly.

Options arise implicitly when firms face alternative business strategies. In both cases, explicit and implicit, a manager needs to know how to apply ?models? such as the Black-Scholes model to value options.

The Black-Scholes model requires 5 inputs, most of which are easily obtained. For example, the strike price is obvious, staring at you in the face. Ditto for the value of the underlying asset. The interest rate is also easily obtained. One challenge is in getting the standard deviation for the underlying asset and annualizing it.

Assignment:

Stock options are traded on the CBOE and listed inwww.cboe.com. Please see attached.

Change (BA Feb 22 2014 110.00 Call) BOEING CO $17.20 4.49(35.33%) Oplan Chen Add to Portfolio CHIC Dy Chart 1720 17.DD 16.50 Change's 3531 LOW 16.DD Prev Clara 17 3 ASK 62WHO 62 Wh Low L4.50 LLAM 1PM Voumi Advanced Chat CALL Suka Pica 11000 Expiration Date