Given the following information about a 3-year call option


Given the following information about a 3-year call option on a certain stock:

• The current stock price is $550.

• The prepaid forward price volatility (the volatility relevant for the BlackScholes formula) is 0.2.

• The strike price is $523.

• The stock pays dividends at an annual continuously compounded yield of 238 0.03.

• The annual continuously compounded interest rate is 0.07.

Find the elasticity of such a call option.

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Financial Management: Given the following information about a 3-year call option
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