What is the price of the option if it is a european call


Consider an option on a dividend-paying stock when the stock price is $41, the strike price is $40, the risk-free interest rate is 6% per annum, the volatility is 35% per annum, and the time to maturity is one year. The dividend to be paid in 6 months is $0.50. What is the price of the option if it is a European call? What is the price of the option if it is a European put? Use the Black Scholes formula to answer the questions above. Make sure that you show or explain all calculations. Make sure you answer all questions above.

Request for Solution File

Ask an Expert for Answer!!
Financial Management: What is the price of the option if it is a european call
Reference No:- TGS02775073

Expected delivery within 24 Hours