Consider the  call option on Apple stock that expires in 2 years and has a strike price of $140. Moreover, continue to assume that the risk-free rate of interest is 5% and that Apple stock returns have an annual volatility of 35%. But, suppose that the current price of Apple stock in the market were $135 instead of $150. What would be the value of the call option, according to the Black-Scholes formula (rounded to the nearest cent)?

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To calculate the value of the call option using the BlackScholes formula you need the following in... View the full answer