Purchase Solution

call option pricing

Not what you're looking for?

Ask Custom Question

A stock is currently priced at $24 per share, the standard deviation of its return is 60% a year, and the risk free rate is 4 percent per year. The firm pays $0.30 quarterly ($1.20 a year) dividend per share. What is the price of a call option with a strike price of $25 and a maturity of three months?

Show all work.

Purchase this Solution

Solution Summary

Call options are depicted in the solution.

Purchase this Solution


Free BrainMass Quizzes
Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.