How much should the call option worth?

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 11EA: How much would you invest today in order to receive $30,000 in each of the following (for further...
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100
Stock
137
51
100
Bond (IF=3%)
103
103
1-year call option, S=100, E=87, r₁=3% (annual)
1 step per year
How much should the call option worth?
Call (E=87)
50
0
Transcribed Image Text:100 Stock 137 51 100 Bond (IF=3%) 103 103 1-year call option, S=100, E=87, r₁=3% (annual) 1 step per year How much should the call option worth? Call (E=87) 50 0
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