Question: PLEASE SOLVE AND PRESENT COMPLETE SOLUTION ABC Corporation plans to purchase a call option for 1,000 Red Corp. ordinary shares at a strike price of

PLEASE SOLVE AND PRESENT COMPLETE SOLUTION

ABC Corporation plans to purchase a call option for 1,000 Red Corp. ordinary shares at a strike price of P489 per share. The contract will be exercisable four months from purchase. The details about the underlying asset are as follows: Market value per share 534.00 Volatility Do not a 31 10% Risk-free rate 3% If the call option is currently selling at P40,000, it is currently over or (under) valued by how much? Use 360 days in a year

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