What is the value of the options contract

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Problem 1: The CEO of JohnSmith was granted 1,000,000 options. The stock price at the time of the granting of the options was $45 and the options are at the money. The risk-free rate was 5% and the options expire in 5 years. The variance on the stock is 0.04. What is the value of the options contract?

Reference no: EM132965470

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