00 Stock 137 51 Bond (rF=3%) 103 100 103 Call (E=87) 50 1-year call option, S=100, E=87, r=3% (annual) 1 step per year How much should the call option worth? 0
00 Stock 137 51 Bond (rF=3%) 103 100 103 Call (E=87) 50 1-year call option, S=100, E=87, r=3% (annual) 1 step per year How much should the call option worth? 0
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
using the chart, how much should the call option worth. please show how to solve this in excel and the formulas
Transcribed Image Text:100
Stock
137
51
100
Bond (r=3%)
103
103
Call (E=87)
1-year call option, S=100, E=87, rp=3% (annual)
1 step per year
How much should the call option worth?
50
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