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The stock price is currently trading at $100. The exercise (strike) price for a call option is $95 and the option expires in 20 weeks.
The stock price is currently trading at $100. The exercise (strike) price for a call option is $95 and the option expires in 20 weeks. Assume 52 weeks in a year. The annual interest rate is 10%. For every $1 increase in the stock price, the call option price goes up by 75 cents. We also know that N(2) is 80% of N(d1). Q5. Ignoring N(d1) and N(D2) and just using the time value of money, the fair value of the call option should be $ Q6. Based on Black and Scholes model, the fair value of the above call option should be $...... The stock price is currently trading at $100. The exercise (strike) price for a call option is $95 and the option expires in 20 weeks. Assume 52 weeks in a year. The annual interest rate is 10%. For every $1 increase in the stock price, the call option price goes up by 75 cents. We also know that N(2) is 80% of N(d1). Q5. Ignoring N(d1) and N(D2) and just using the time value of money, the fair value of the call option should be $ Q6. Based on Black and Scholes model, the fair value of the above call option should be $
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