Braddock Construction Co

question 5

Multiple Choice

Braddock Construction Co.'s stock is trading at $20 a share.Call options that expire in three months with a strike price of $20 sell for $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 more than $2.
• B) The price of the call option will increase by less than $2, and the percentage increase in price will be less than 10%.
• C) The price of the call option will increase by less than $2, but the percentage increase in price will be more than 10%.
• D) The price of the call option will increase by more than $2, but the percentage increase in price will be less than 10%.
• E) The price of the call option will increase by $2.

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Definitions:

Ideas

Concepts, thoughts, or suggestions.

Time

A continuous measure in which events can be ordered from the past through the present and into the future, often used as an independent variable in studies.

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A colored fluid or paste used for writing, drawing, printing, or duplicating texts and images.

Space

In statistics, it often refers to the set of all possible outcomes or results that we are studying or analyzing.