A stock is currently priced at $35. A call option with an expiration of one year has
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A stock is currently priced at $35. A call option with an expiration of one year has an exercise price of $50. The risk-free rate is 12 percent per year, compounded continuously, and the standard deviation of the stock’s return is infinitely large. What is the price of the call option?
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In this scenario since the standard deviation of the stocks return is infinitely large it implies th...View the full answer
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Related Book For
Fundamentals Of Corporate Finance
ISBN: 9780072553079
6th Edition
Authors: Stephen A. Ross, Randolph Westerfield, Bradford D. Jordan
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