1 use the blackshyscholes formula to find the value of a, Ask an Expert

Finance

1. Use the BlackScholes formula to find the value of a call option on the following stock: Time to expiration = 6 months

Standard deviation = 50% per year Exercise price = $50

Stock price = $50

Interest rate = 3%

Dividend = 0

2. At expiry, a European call option is always worth:

a) the maximum of the exercise price minus the share price, and zero.

b) at least the share price.

c) the difference between the share price and the price paid for the option.

d) None of the above.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M93053177

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