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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 one-year call option to buy one acre of Los Angeles real estate. The exercise price is $2.07 million. Suppose the land is occupied by a warehouse generating rents of $185,000 after real estate taxes and all other out-of-pocket costs. The present value of the land plus the warehouse is $1.77 million. The annual standard deviation is 16% and the interest rate is 14%.
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 3 decimal places.

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