Question
The price of Ervin Corp. stock will either be $60 or $81 at the end of the year. Call options are available with one year
The price of Ervin Corp. stock will either be $60 or $81 at the end of the year. Call options are available with one year until expiration. Continuously compounded T-bills currently yield 4.13 %. Suppose the current price of Ervin stock is $77. What is the value of the call if the strike price is $55 per share? (Round answer to 2 decimal places. Do not round intermediate calculations).
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Public Finance
Authors: Harvey S Rosen, Ted Gayer
9th International Edition
0071267883, 9780071267885
