Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Question
Consider a European call option on a (non-dividend paying) stock currently worth £60. The option’s exercise price is £40, the continuously compounded interest rate is 2% and the option has 6 months to maturity. Which of the values below provides the tightest valid lower bound on the value of the option (rounded to the nearest penny)?
Question 7Answer
a.
£0.00
b.
£20.40
c.
£20.00
d.
£19.60
SAVE
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