Question 7(15 points). Assume the Black-Scholes framework. You are given: S(t) is the stock price at time t. i) The stoc

[answerhappygod]

Question 7 15 Points Assume The Black Scholes Framework You Are Given S T Is The Stock Price At Time T I The Stoc 1 (33 KiB) Viewed 86 times

Question 7(15 points). Assume the Black-Scholes framework. You are given: S(t) is the stock price at time t. i) The stocks volatility is 25%. ii) The continuously compounded expected rate of return is 8%. iii) The stock pays dividends continuously at a rate of 3% proportional to its price. iv) The continuously compounded risk-free interest rate is 4%. v) The current stock price is S(0) = 125. Calculate ECS (3) S (3) <110). ( ) A 85 OB. 100 O C. 115 (D. 130 ( E. 145