Question
You currently own a one-year call option on a companies stock. The current stock price is $10.25 and the risk-free rate of return is 1.3
You currently own a one-year call option on a companies stock. The current stock price is $10.25 and the risk-free rate of return is 1.3 percent compounded annually. Your option has a strike price of $5.00 and the stock will either be worth $8.00 or $12.00 at the end of the year. What is the current value of your call option?
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Analysis For Financial Management
Authors: Robert Higgins, Jennifer Koski, Todd Mitton
13th Edition
1260772365, 978-1260772364
