Assume that the current price of FGX stock is $33, that a 6 month call option on the stock has a strike or exercise price of $35.00, the risk free rate is 4%, and that you have calculated N(d1) as .65 and N(d2) as .55
Use the Black-Scholes model to calculate the price of the option.
What will be an ideal response?
Answer: $33(.65) - 35(.9900) × .55 = $2.58
You might also like to view...
Which process produces both NADH and FADH2?
A. fermentation B. glycolysis C. the preparatory reaction D. the electron transport system E. the citric acid cycle
The Marketing Research Association is an organization that ________
A) supports the interests and development of customers needing research B) oversees the Professional Researcher Certification C) monitors the Internet for organizations that spam D) audits research firms for the purpose of improving data collection procedures E) is a lobbying organization representing multinational firms
Acme Global is trying to predict and prepare for what its competitors will do next. In a way, Acme Global is scrambling and jockeying for position in the market. This attempt to predict and prepare is part of the ______ section of the five-forces analysis.
A. power of suppliers B. power of buyers C. threat of substitute products and services D. rivalry among competitors
A study revealed that ______ group decisions surpassed the quality of their best individual members’ decisions 56% of the time
A. the Delphi method B. brainstorming C. nominal group technique D. stepladder