Planning to buy call option on the stock

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1. You are planning to buy a call option on the Archer Inc. stock. This stock is currently selling in the market at $75. You plan to buy this stock 4 years from now and you wish to pay no more than $100?to buy this stock at that time. The volatility or risk of this stock (sigma) is 20% and the risk free rate?is 10%. ?What is 'd1'?

A) -0.4808 B) -0.6808 C) 0.6808 D) 0.4808

2. Using the information in the question above, if N(d1)=0.6847 and N(d2)=0.5322, then the call option premium for a call option with a time to expiration of 4 years for Archer Inc. stock is?

A) $11.96 B) $5.98 C) $7.71 D) $15.68

Reference no: EM131568595

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