Question
The price of Ervin Corp. stock will either be $65 or $87 at the end of the year. Call options are available with one year
The price of Ervin Corp. stock will either be $65 or $87 at the end of the year. Call options are available with one year until expiration. Continuously compounded T-bills currently yield 3.74 %. Suppose the current price of Ervin stock is $73.
What is the value of the call option, using the risk-free approach, if the strike price is $75 per share? (Round answer to 2 decimal places. Do not round intermediate calculations).
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Multinational Finance Evaluating The Opportunities Costs And Risks Of Multinational Operations
Authors: Kirt C. Butler
6th Edition
111921968X, 978-1119219682
