Suppose you own a call option on a stock for which the following applies: Underlying stock's price = $60 Exercise price on the option = $58 Annual risk-free rate = 5 percent Time to expiration on the option = 3 months Standard deviation of the underlying stock's return = .12 Calculate the value of the option.
Suppose you own a call option on a stock for which the following applies: Underlying stock's price = $60 Exercise price on the option = $58 Annual risk-free rate = 5 percent Time to expiration on the option = 3 months Standard deviation of the underlying stock's return = .12 Calculate the value of the option.
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
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