Question: The CEO of NuValue was granted 1,000,000 options. The stock price at the time of the granting of the options was $45 and the options

The CEO of NuValue was granted 1,000,000 options. The stock price at the time of the granting of the options was $45 and the options are at the money. The risk-free rate was 5% and the options expire in 5 years. The variance on the stock is.04. What is the value of the options contract? If he had negotiated a larger salary and only 10,000 options, what would be the value of the options contract?

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