A Firm has a stock price of 6 5 and an annual standard deviation of 2 5

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Question:

A Firm has a stock price of

65

and an annual standard deviation of

25 % .

The risk

-

free rate is

10 % (

.

.) .

This firm will pay a dividend of $

8

in exactly

3

months and no other dividends over the next year.

Price an American call written on this stock with an exercise price of $

70

and a time to maturity of one year

Posted Date: May 18, 2024 11:05 PM

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A Firm has a stock price of 6 5 and an annual standard deviation of 2 5

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