Use the Following Information to Answer the Question(s)below

question 10

Multiple Choice

Use the following information to answer the question(s) below.
(Please use a copy of the Cumulative Probabilities for the standard normal distribution for these problems. )
Taggart Transcontinental's stock has a volatility of 25% and a current stock price of $40 per share.Taggart pays no dividends.The risk-free interest rate is 4%.
-Consider a one-year,at-the-money call option on Taggart stock.The effect on the price of this call option due to an increase in the risk-free rate from 4% to 6% is closest to:

• A)$0.50 decrease.
• B)$0.50 increase.
• C)$0.70 decrease.
• D)$0.80 increase.

---

Definitions:

Professional Practice

The conduct and work performed by a professional in their specific field, adhering to established standards and ethics.

Intuitive Sense

An inherent ability to understand or know something without conscious reasoning.

Heavy Makeup

The application of cosmetics in a manner that is visibly thicker or more intense than is typically worn for a natural look.

Advocacy

The act of supporting or arguing in favor of a cause, policy, or group of people.