Question: You are evaluating a call option on F with a strike price of $491 . If F is able to develop a new technology, the

You are evaluating a call option on

F

with a strike price of

$491

.\ If

F

is able to develop a new technology, the price per share will go up to

$761

. Otherwise, the price will go down to

$214

. Let's assume that these are the only two possible scenarios. F shares today are trading at

$530

. You know that the risk-free rate is

5%

.\ What is the price of this call option?

You are evaluating a call option on F with a strike price of $491. If F is able to develop a new technology, the price per share will go up to $761. Otherwise, the price will go down to $214. Let's assume that these are the only two possible scenarios. F shares today are trading at $530. You know that the risk-free rate is 5%. What is the price of this call option

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