Use the Black-Scholes Model to find the price for a call option with the following inputs: (1)

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Use the Black-Scholes Model to find the price for a call option with the following inputs:

(1) Current stock price is $30,

(3) Time to expiration is 4 months,

(4) Annualized risk-free rate is 5%, and

(5) Variance of stock return is 0.25.

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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Corporate Finance A Focused Approach

ISBN: 978-1439078082

4th Edition

Authors: Michael C. Ehrhardt, Eugene F. Brigham

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Question Posted: Sep 23, 2011 11:15 AM

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Use the Black-Scholes Model to find the price for a call option with the following inputs: (1)

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