Question
The price of Ervin Corp. stock will either be $64 or $88 at the end of the year. Call options are available with one year
The price of Ervin Corp. stock will either be $64 or $88 at the end of the year. Call options are available with one year until expiration. Continuously compounded T-bills currently yield 3.89 %. Suppose the current price of Ervin stock is $74.
What is the value of the call option if the strike price is $75 per share? (Round answer to 2 decimal places. Do not round intermediate calculations).
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Fundamentals Of Contemporary Financial Management
Authors: R. Charles Moyer, James R. McGuigan, Ramesh P. Rao
2nd Edition
0324406363, 978-0324406368
