A call option on ibm has an exercise price of 100 the share


A call option on IBM has an exercise price of 100, the share price S is 120. The option will exprie in 6 months, and the riskfree rate is 10% p.a. and the historical variance of the returns of IBM is 12% p.a. Before the option expires, IBM is expected to pay 2 regular dividends of $2 per share at the end of teh second month and the fifth month. Please determine the prices of this IBM call option if it can be exercised prior to maturity.

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Financial Management: A call option on ibm has an exercise price of 100 the share
Reference No:- TGS01465957

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