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

question 1

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%.
-The Black-Scholes Δ of a one-year,at-the-money call option on Taggart stock is closest to:

• A)0.2850.
• B)0.4840.
• C)0.5160.
• D)0.6141.

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Definitions:

Capital Gains Rate

The tax rate applied to the profit made from selling an asset at a higher price than its purchase price.

Insider Trading

The trading of a public company's stock or other securities by individuals with access to nonpublic, material information about the company.

Financial Markets

Platforms or systems where parties engage in the exchange of financial instruments such as stocks, bonds, currencies, and derivatives.

Bell Curve

A graphical representation of a normal distribution, showing how the likelihood of variables is highest near the mean and decreases symmetrically in both directions.