Question: Question 4 [30 m arks] Consider a stock with a price of $120 and a standard deviation of 20 percent. The stock will pay a

Question 4 [30 m arks] Consider a stock with a price

Question 4 [30 m arks] Consider a stock with a price of $120 and a standard deviation of 20 percent. The stock will pay a dividend of $5 in 40 days and a second dividend of $5 and 130 days. The current risk-free rate is 5 percent per annum. An American call orn this stock has an exercise price of $150 and expires in 100 days Price the American call option using the Black-Scholes Model. Show all calculations

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