Given the Following Data: Stock Price = $50; Exercise Price

question 22

Multiple Choice

Given the following data: Stock price = $50; Exercise price = $45; Risk-free rate = 6%; variance = 0.2 ; Expiration = 3 months. Calculate value of a European call option: [Use Black-Scholes Formula]

• A) $7.62
• B) $7.90
• C) $5.00
• D) none of the above

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