- +1-530-264-8006
- info@tutorsglobe.com

Finding the price of a call option on the stock

Problem: The current price of a stock is $20. In 1 year, the price will be either $26 or $16. The annual risk-free rate is 5%. Find the price of a call option on the stock that has a strike price of $21 and that expires in 1 year.

Now Priced at $20 (50% Discount)

Recommended **(99%)**

18,76,764

Questions

Asked

21,311

Experts

9,67,568

Questions

Answered

Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!

Submit Assignment2015 © Tutors Globe. All rights reserved.

## Q : Deceptive way of quoting interest rates

This problem illustrates a deceptive way of quoting interest rates called add-on interest.