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In a specific wager, Pat is paid $5.00 if the price of ABC Corp. is above...

In a specific wager, Pat is paid $5.00 if the price of ABC Corp. is above $85.00. Currently, ABC Corp. price is $75.00, σ = 0.25, r = 0.04, div = 0 and the wager lasts 6 months. If the price is below $85.00, Pat must pay $5.00. What is the net value of Pat's wager, and show the details?

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Pat is paid $5.00 if the price of ABC Corp. is above $85.00. Currently, ABC Corp. price is $75.00, σ = 0.25, r = 0.04, div = 0 and the wager lasts 6 months. If the price is below $85.00, Pat must pay $5.00. The net value of Pat's wager is $2.49.

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