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 4.67 %. Suppose the current price of Ervin stock is $75.
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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International Finance Transactions Policy And Regulation
Authors: Hal Scott, Anna Gelpern
21st Edition
1634602048, 978-1634602044
