You Own a Call Option on Beaker Glass Stock That

question 35

Multiple Choice

You own a call option on Beaker Glass stock that expires in one year. The exercise price is $35. The current price of the stock is $38.20 and the risk-free rate of return is 4.7 percent. Assume the option will finish in the money. What is the current value of the call option?

• A) $0
• B) $1.49
• C) $3.97
• D) $4.77
• E) $5.46

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