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Question
Lechno, Inc. issues compensation options with the following terms. Strike = $65,price = $63.50, σ = 0.22, r = 0.045, div = 0.015. What is the value of the option if it will be repriced at $40? Assume 10 years to expiration.
A) $18.64
B) $22.22
C) $24.32
D) $26.84
Answer
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