Cola Company Options Have an Exercise Price of $45 and Expire

question 35

Multiple Choice

Cola Company options have an exercise price of $45 and expire in 156 days. The current price of Cola Company stock is $44.375. The (annually compounded) risk-free rate is 7 percent per year and the standard deviation of Cola Company's stock returns is 0.31. Calculate d1.

• A)0.0226
• B)0.1750
• C)−0.3157
• D)0.3157

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Definitions:

Fears

Emotional responses to perceived threats, which can vary in intensity and cause significant distress or avoidance behaviors.

Countertransference

The emotional reaction of a therapist toward the client that may interfere with objectivity, often based on the therapist's own unresolved issues.

Empathy

The ability to understand and share the feelings of another, fostering emotional connection and support.

Dysfunctional

Pertains to something that is not operating normally or effectively, often causing negative effects.