8 Using the Black-Scholes formulation, compute the value of an option that expires in one year...

 

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8 Using the Black-Scholes formulation, compute the value of an option that expires in one year (T = 1) if the following facts apply. K = $40 exercise price S = $45 stock price now K r = 1.20 (r = 0.20) 2=0.0225 = 0.15 8 Using the Black-Scholes formulation, compute the value of an option that expires in one year (T = 1) if the following facts apply. K = $40 exercise price S = $45 stock price now K r = 1.20 (r = 0.20) 2=0.0225 = 0.15

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To compute the value of the option using the BlackScholes formula we need to calculate the following ... View the full answer