Question
The price of a stock, which pays no dividends, is $69.7 and the strike price of a one year European call option on the stock
The price of a stock, which pays no dividends, is $69.7 and the strike price of a one year European call option on the stock is $58.4. The risk-free rate is 4.1% (continuously compounded. Assuming there are no arbitrage opportunities, what is the lowest possible price of the option?
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
12th edition
978-0324597714, 324597711, 324597703, 978-8131518571, 8131518574, 978-0324597707
