# Thanks P14.17- A stock trades for\$42 per share.

Please, clarify the calculation, so I can understand, If is better to have in excel please clarify as well. Thanks

P14.17- A stock trades for ​\$42 per share. A call option on that stock has a strike price of ​\$53 and an expiration date three months in the future. The volatility of the​stock’s returns is 46 ​%, and the​ risk-free rate is 4 ​%. What is the Black and Scholes value of this​option?

The Black and Scholes value of this call option is \$  ________

P14.18-A stock trades for ​\$45 per share. A call option on that stock has a strike price of ​\$51 and an expiration date nine months in the future. When the volatility of the​ stock’s returns is​ 30%, the Black and Scholes value of the option is​ \$3.82. Now​ assume, the volatility of the​ stock’s returns is 56 ​%, and the​ risk-free rate is 4 ​%.

a) Intuitively, would you expect this to cause the call price to rise or​ fall? By how much does the call price​ change?

b)The Black and Scholes value of this call option is \$________

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