Question: 8 Using the Black-Scholes formulation, compute the value of an option that expires in one year (T = 1) if the following facts apply.

8 Using the Black-Scholes formulation, compute the value of an option that

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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