A call option matures in six months. The underlying stock price is $79, and the
ID: 2721434 • Letter: A
Question
A call option matures in six months. The underlying stock price is $79, and the stock’s return has a standard deviation of 29 percent per year. The risk-free rate is 5.8 percent per year, compounded continuously. If the exercise price is $0, what is the price of the call option? (Omit the "$" sign in your response.)
A call option matures in six months. The underlying stock price is $79, and the stock’s return has a standard deviation of 29 percent per year. The risk-free rate is 5.8 percent per year, compounded continuously. If the exercise price is $0, what is the price of the call option? (Omit the "$" sign in your response.)
Explanation / Answer
It can be found using black sholes model
Using these formuala to calculate call price can be calculate but exervise price should always be greater than 0
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