Use the Black-Scholes Model to Determine the Option Price for the May

question 14

Essay

Use the Black-Scholes model to determine the option price for the May 35 call for Nibblers as of April 18, 2015. The expiration date for this option is May 18, 2015. The annualized interest rate on a T-bill that matures that same day is 3.0%. Nibblers stock closed at 36. The historic variance for Nibblers is .25. Assume a 365 day year.

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Definitions:

New Vision

Fresh or innovative outlook, strategy, or idea intended to guide the direction of an organization or project.

LMX Differentiation

focuses on the variability of leader-member exchange relationships within a team, indicating that a leader may have different quality relationships with various members.

Quality LMX Relationships

High-quality leader-member exchange relationships characterized by mutual trust, respect, and obligation.

Same Workgroup

refers to a team of individuals who are assigned to the same task or project within an organization and who work closely together to achieve common goals.