What is the premium for a call option on a stock with the following characteristics? Current stock...
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- What is the premium for a call option on a stock with thefollowing characteristics?
Current stock price
$70
Stock price volatility (standard deviation)
0.0693
Continuously compounded annual risk free rate
11.94%
Strike price (or exercise price)
$80
Time to expiration (in years)
9 months
What is the option premium if thisoption is a European put and the stock will pay a dividend of $3 insix months?
- What is the premium for a call option on a stock with thefollowing characteristics?
Current stock price | $70 |
Stock price volatility (standard deviation) | 0.0693 |
Continuously compounded annual risk free rate | 11.94% |
Strike price (or exercise price) | $80 |
Time to expiration (in years) | 9 months |
What is the option premium if thisoption is a European put and the stock will pay a dividend of $3 insix months?
Answer & Explanation Solved by verified expert
4.0 Ratings (812 Votes)
SolutionWe will use BlackScholes formula for calculation of call optionand put
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