You own one call option with an exercise price of $27.50 on Nifong Development stock. The stock is currently selling for $28 per share but is expected to sell for either $26 or $30 per share in one year. The risk-free rate of return is 3.65 percent and the inflation rate is 3.2 percent. 

What is the current call option price if the option expires one year from now?

Answer rating: 100% (QA)

To calculate the current call option price we can use the BlackScholes option ... View the full answer