Question
TSMs stock price is currently $103 and it pays no dividends. The stock price a year from now will be either $127 or $88. The
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TSMs stock price is currently $103 and it pays no dividends. The stock price a year from now will be either $127 or $88. The interest rate is 5% per year. You sell your client a call option on TSM with a strike price of $122 and an expiration date 1 year from now. What is the fair value of this call option?
$2.20
$2.46
$4.90
$11.81
None of the above
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Executive Finance And Strategy
Authors: Ralph Tiffin
1st Edition
0749471506, 978-0749471507
