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What is the value of the following call option according to the Black Scholes Option Pricing Model? What is the value of the put options?
- What is the value of the following call option according to the Black Scholes Option Pricing Model? What is the value of the put options?
Stock Price = $62.50
Strike Price = $60.00
Time to Expiration = 9 Months = 0.75 years.
Risk-Free Rate = 2.0%.
Stock Return Standard Deviation = 0.45.
- Draw the payoff picture at expiration for a long position in a call option that has a premium of $1.75 and a strike price of $40.
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