I understand the general points in the solution on how to identify the graphs to the different elements being varied. However, for completeness sake I calculated the call option equation to see if I could get the values on the graphs. Unfortunately I do not even come close, am I doing something wrong? Take Graph 2 for example. I calculate the call option as follows: S - K*exp(-rT) 1. S=240 => 240 - 250*exp(-0.06*0.5) = -2.6114 but Graph 2 does not even contain a negative value? 2. S=250 => 250 - 250*exp(-0.06*0.5) = 7.3886 but Graph 2 shows a value between 10 and 20 for S=250. I suspect my calculation of the call option might be wrong and I need to include the volatility value of 0.2 somewhere into this calc? Please can someone explain what I am doing wrong? Thank you!
