Question: 2 For this question, you should use the standard Black Scholes model for the market described above; the parameters should be appropriately chosen so as

2 For this question, you should use the standard Black Scholes

2 For this question, you should use the standard Black Scholes model for the market described above; the parameters should be appropriately chosen so as to correspond to the characteristics of the market. Note that Sr denotes the price of the risky asset at the terminal horizon. a) Price a European call option with strike K written on the risky asset and maturing at the terminal horizon

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