Use the Black-Scholes Option Pricing Model for the Following Problem

question 61

Multiple Choice

Use the Black-Scholes Option Pricing Model for the following problem.Given: S_O= $70; X = $70; T = 70 days; r = 0.06 annually (0.0001648 daily) ; • = 0.020506 (daily) .No dividends will be paid before option expires.The value of the call option is _______.

• A)$10.16
• B)$5.16
• C)$0.00
• D)$2.16
• E)none of the above

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Definitions:

Melanocytes

Cells located in the bottom layer of the skin's epidermis and in the middle layer of the eye, responsible for producing melanin, the pigment that colors the skin, hair, and eyes.

Melanin

A pigment found in most organisms, responsible for the color of skin, hair, and eyes, providing protection against UV radiation.

Decreased Blood Flow

Decreased blood flow refers to reduced circulation of blood in the body, which can lead to various health issues due to insufficient oxygen and nutrient supply to tissues.

Pale

Having a lighter shade of color or lacking in intensity; can refer to physical appearance or luminosity.