Assume you have been given the following information on Purcell Industries: Current stock price = $15........................,,,,,..Exercise price
Question:
Assume you have been given the following information on Purcell Industries:
Current stock price = $15........................,,,,,..Exercise price of option = $15
Time to maturity of option = 6 .....................months Risk-free rate = 6%
Variance of stock return = 0.12 .....................d1 = 0.24495
d2 _ 0.00000 N(d1) _ 0.59675 .........................N (d2) = 0.50000
Using the Black-Scholes Option Pricing Model, what would be the value of the option?
MaturityMaturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...
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P 15 X 15 t 05 r RF 006 s 2 012 d 1 024495 d 2 00000 ...View the full answer
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Related Book For 
Financial management theory and practice
ISBN: 978-0324422696
12th Edition
Authors: Eugene F. Brigham and Michael C. Ehrhardt
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