Question
The price of Ervin Corp. stock will either be $65 or $89 at the end of the year. Call options are available with one year
The price of Ervin Corp. stock will either be $65 or $89 at the end of the year. Call options are available with one year until expiration. Continuously compounded T-bills currently yield 2.58 %. Suppose the current price of Ervin stock is $74.
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).
Topic: Two-State Binomial Option Pricing
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Fundamentals Of Futures And Options Markets
Authors: John Hull
9th Edition
0134083245, 9780134083247
