Warnes Motors' Stock Is Trading at $20 a Share

question 6

Multiple Choice

Warnes Motors' stock is trading at $20 a share.Three-month call options with an exercise price of $20 have a price of $1.50.Which of the following will occur if the stock price increases 10% to $22 a share?

• A) The price of the call option will increase by $2.
• B) The price of the call option will increase by less than $2,but the percentage increase in price will be more than 10%.
• C) The price of the call option will increase by less than $2,and the percentage increase in price will be less than 10%.
• D) The price of the call option will increase by more than $2.
• E) The price of the call option will increase by more than $2,but the percentage increase in price will be less than 10%.

Analyze the impact of personal changes (e.g., marriage, divorce) on estate distribution.

Identify the characteristics and legality of different types of wills (e.g., holographic, handwritten).

Understand roles and duties involved in estate management, including trustees and executors.

Recognize conditions under which estate assets are distributed to various heirs including lineal, collateral, and in cases of no heirs.

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Definitions:

Exponential Growth

A growth pattern characterized by the rate of increase becoming quicker relative to the growing total number or size.

Financial Calculation

The process of determining financial figures, often involving interest, cash flows, investments, margins, and returns analysis.

Percentage

A part or portion of a whole, expressed as a fraction of 100, used to quantify relative differences or changes.

Daily Interest

The interest amount calculated on the principal amount on a daily basis.