Question: A stock trading at $ 4 8 has a volatility of 2 7 percent. The continuously compounded risk - free rate is 5 percent. A

A stock trading at $48 has a volatility of 27 percent. The continuously compounded risk-free rate is 5 percent. A dividend of $1.5 is expected in 3 months, and no other dividends are expected during the next 12 months.
Price a European call written on this stock with an exercise price of $50 and a time to maturity of one year.

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