Give typed answer (b) Bintai Kinden Corporation is currently offering a European call option to its existing investors, a commonshare with non-dividend payment. This call option has RM26 exercise price with 6 months to maturity. BintaiKinden Corporation's share is trading at RM30 per share and the volatility is stated at 8 percent per year.Calculate the price of call option by using Black-Scholes Option Pricing Model if the Malaysia Government Bill(MGB) has a compounded interest of 10 percent annually.

A call option is a chance to purchase assets at a specified price before or on a certain…

(b) Bintai Kinden Corporation is currently offering a European call option to its existing investors, a common share with non-dividend payment. This call option has RM26 exercise price with 6 months to maturity. Bintail Kinden Corporation's share is trading at RM30 per share and the volatility is stated at 8 percent per year. Calculate the price of call option by using Black-Scholes Option Pricing Model if the Malaysia Government Bill (MGB) has a compounded interest of 10 percent annually.

(b) Bintai Kinden Corporation is currently offering a European call option to its existing investors, a common share with non-dividend payment. This call option has RM26 exercise price with 6 months to maturity. Bintail Kinden Corporation's share is trading at RM30 per share and the volatility is stated at 8 percent per year. Calculate the price of call option by using Black-Scholes Option Pricing Model if the Malaysia Government Bill (MGB) has a compounded interest of 10 percent annually.

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter11: Managing Transaction Exposure

Section: Chapter Questions

Problem 56QA

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