Using the Black/Scholes Option Pricing Model, calculate the value of the call option given: S = 70; X = 80; T = 3 months; = .49; Rf = 10% What is the intrinsic value of the call? What stock price is necessary to break - even?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Using the Black/Scholes Option Pricing Model,
calculate the value of the call option given:
S = 70; X = 80; T = 3 months;
= .49; Rf = 10%
What is the intrinsic value of the call? What stock
price is necessary to break - even?
Transcribed Image Text:Using the Black/Scholes Option Pricing Model, calculate the value of the call option given: S = 70; X = 80; T = 3 months; = .49; Rf = 10% What is the intrinsic value of the call? What stock price is necessary to break - even?
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