Problemlissa cos stock price is currently 3025 a 6-month, Ask an Expert

Finance

Problem:

Lissa Co.'s stock price is currently $30.25. A 6-month call option on Lissa's stock has a strike price of $25 and has an expected volatility of 40% (i.e., expected standard deviation = 40%). The risk-free rate is 6%.

Required:

Question: According to the Black-Scholes option pricing model, what is the value of the option?

Note: Please show how to work it out.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91162922

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