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need assistance with this problem. 84,000 is not the correct answer. will upvote for correct answer, thanks! You own a one-year European call option to
need assistance with this problem. 84,000 is not the correct answer. will upvote for correct answer, thanks!
You own a one-year European call option to buy one acre of Los Angeles real estate. The exercise price is $2.06 million. Suppose the land is occupied by a warehouse generating rents of $180,000 after real estate taxes and all other out-of-pocket costs. The present value of the land plus the warehouse is $1.76 million. The annual standard deviation is 15% and the interest fate is 13% How much is your call worth? (Enter your answer in dollars not in millions, Do not round intermediate calculations.) Step by Step Solution
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