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On May 25, 2018 you purchased an option which will allow you to sell a commercial building on August 14, 2022 for $42 million. Your

  1. On May 25, 2018 you purchased an option which will allow you to sell a commercial building on August 14, 2022 for $42 million. Your current estimate of the value of the commercial building is $38 million. The annual volatility for the change in the commercial buildings value is 57% and the risk-free rate is 6%.
    1. What type of option is this?
    2. Calculate the value of the option to sell the commercial building.

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