# Price of a Call Option Using the Black-Scholes Model

Use the Black-Scholes model to find the price for a call option with the following inputs:

(1) Current Stock price is $30

(2) Exercise price is $35

(3) time to expiration is 4 months,

(4) annualized risk-free rate of 5%, and

(5) variance of stock return is .25

https://brainmass.com/business/black-scholes-model/price-of-a-call-option-using-the-black-scholes-model-194262

#### Solution Preview

Please see attached file

Use the Black-Scholes model to find the price for a call option with the following inputs: (1) Current Stock price is $30 (2) Exercise price is $35 (3) time to expiration is 4 months, (4) annualized risk-free rate of 5%, and (5) variance of stock return is .25

We will use Black Scholes Pricing Formula

Value of call= S N(d1) - X * e -r(T-t) * ...

#### Solution Summary

The price of a call option is calculated using the Black-Scholes Option Pricing Model in an attached Excel spreadsheet.