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Answer the following question by working the BSOPM by hand: –Assume C L W Inc. does...

Answer the following question by working the BSOPM by hand:

–Assume

  • C L W Inc. does not pay dividends.
  • The standard deviation of C L W is 45% per year.
  • The risk-free rate is 5%.
  • C L W stock has a current price of $24.

–Using the Black-Scholes formula, what is the price for a ½ year American call option on C L W with a strike price of $30? (Use the normsdist function in excel to determine d1)

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