Suppose S = $100, K = $95, = 30%, r = 0.08, = 0.03, and

Question:

Suppose S = $100, K = $95, σ = 30%, r = 0.08, δ = 0.03, and T = 0.75. Using the technique in the previous problem, compute the Greek measure corresponding to a change in the dividend yield. What is the predicted effect of a change of 1 percentage point in the dividend yield?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...