What Is the Current Value of a Six-Month Call Option

question 51

Multiple Choice

What is the current value of a six-month call option with an exercise price of $15? The six-month risk-free interest rate (periodic rate) is 5%. [Use the replicating portfolio method]

• A) $8.73
• B) $10.28
• C) $16.88
• D) $13.33

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Definitions:

Environmental Events

External factors and occurrences in one’s surroundings that can influence behavior, emotions, and psychological well-being.

Consciousness Raising

The practice of increasing awareness around social, political, and personal issues, often aimed at fostering change.

Content Of Therapy

The specific issues, themes, and topics explored and addressed within a therapy session.

Behavioral

Relating to the actions or reactions of a person or animal in response to external or internal stimuli.