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The current stock price of Flip-flop Firm is R74 and the stock does not pay dividends. The instantaneous risk-free rate of return is 4%. The
The current stock price of Flip-flop Firm is R74 and the stock does not pay dividends. The instantaneous risk-free rate of return is 4%. The instantaneous standard deviation of Flip-flops stock is 25%. You want to purchase a call option on this stock with an exercise price of R65 and an expiration date of 2 months from now. Using the Black Scholes OPM, what should the call option be worth today? R6.92 R9.48 R9.26 R0.01 None of the above
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