Hello,
initial cost of the project = $2500000
discounted inital cost of the project = $2029000
in the answer the Exercise price in bsop model (Pe) is the undiscounted initial cost of the project,could you please tell me why we’ve not taken the discounted value?
Thanks
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NENTE CO (june 12) – BSOP
3y ago#1Pe is not discounted - it is the amount of the exercise price, which is 2,500,000.
Have you watched my free lectures on option pricing?
Thank you and I will watch the lectures right away
3y ago#3You are welcome :-)
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