Letrsquos suppose the current value of ou stock is 43 you, Ask an Expert

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Let’s suppose the current value of OU stock is $43. You wish to buy a call option on OU stock with a strike price of $46 and time to maturity of 6 months because you think some really good news is going to come out about the company in the near future. Assume the risk-free rate is 1% and the volatility of OU stock will be 27% over the life of the option contract. Let’s suppose OU does not pay any dividends. Using the Black Scholes option pricing model (OPM) what should the premium on this call option be?

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Financial Management, Finance

Category:- Financial Management
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