How is riskless hedge used in the black scholes opm

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Reference no: EM131913881

1. How is a “riskless hedge” used in the Black Scholes OPM?

2. A finance company offers a 24-month installment loan with an APR of 13.5%. Robert wishes to use the loan to finance a delivery truck for $31,200. After first using Table 13-1 from your text to find the finance charge, calculate the monthly payment.

3. In the Black-Scholes OPM, what happens to the value of a put option if variance increases?

Reference no: EM131913881

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