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The stock price of a company is currently $75 per share. A call option on the companys stock has an exercise price of $80 and
The stock price of a company is currently $75 per share. A call option on the companys stock has an exercise price of $80 and six months to expiration. The continuous riskfree rate is 5% per year and the stock's volatility is 28% per year.
A.) Use the Black-Scholes formula to find the value of the call option.
B.) Calculate the hedge ratio for the call option.
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