Use the black-scholes formula to solve these problems 1, Ask an Expert

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Use the Black-Scholes formula to solve these problems: 1. Price a one year European call option with strike price 32, written on a $30 stock. Volatility is 12%. The stock will pay a dividend in 2 months time, and then again in 8 months time, each of $3. Interest rates are 4%. 2. Now suppose that the option in the previous question was American. Use Black’s approximation to price the option.

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Category:- Financial Management
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