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December 5th, 2015, 10:28 AM   #1
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expected value on call option

I am not used to doing it this way and I cannot seem to get it to come out. Usually, I go off the given stock data, but in this case it is not given and they are doing parameter estimation.

Can anyone explain how they are able to come up with the .3828 and .7011 for the expected growth rate and the volatility?

The S = 35.36 is the stock price at time 0, or S_o where S_t is the stock at any given time t.

See the links for images of what I am talking about.

https://plus.google.com/u/1/11383487...75140575813364

https://plus.google.com/u/1/11383487...75140575813364


Thanks.

Last edited by skipjack; December 5th, 2015 at 11:47 AM.
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