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You own a one - year call option to buy one acre of Los Angeles real estate. The exercise price is $ 2 . 0
You own a oneyear call option to buy one acre of Los Angeles real estate. The exercise price is $ million. Suppose the land is occupied by a warehouse generating rents of $ after real estate taxes and all other outofpocket costs. The present value of the land plus the warehouse is $ million. The annual standard deviation is and the interest rate is
How much is your call worth?
Note: Enter your answer in dollars not in millions. Round you final answer to nearest whole number. Round the value of p to decimal places.
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