A stock trades for $45 per share. A call option on that stock has a strike price

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A stock trades for $45 per share. A call option on that stock has a strike price of $50 and an expiration date 1 year in the future. The volatility of the stock’s returns is 30%, and the risk-free rate is 2%. What is the Black and Scholes value of this option?
Strike Price
In finance, the strike price of an option is the fixed price at which the owner of the option can buy, or sell, the underlying security or commodity.
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Fundamentals of Investing

ISBN: 978-0133075359

12th edition

Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk

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