What Is the Value of a 9-Month Call with a Strike

question 31

Multiple Choice

What is the value of a 9-month call with a strike price of €45 given the Black-Scholes Option Pricing Model and the following information?
Share price €48
Exercise price €45
Time to expiration .75
Risk-free rate .05
N(d1) .718891
N(d2) .641713

• A)€2.03
• B)€4.86
• C)€6.69
• D)€8.81
• E)€9.27

Recognize the historical context and evolution of economic theories over time.

Understand the relationship between money supply, velocity of circulation, price level, and output.

Differentiate between the economic policies advocated by different schools of economics.

Analyze the implications of economic theories on fiscal and monetary policy.

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Definitions:

Direct Materials

Materials in their unprocessed state that are directly linked to the manufacturing of specific products or services.

Direct Labor Costs

The expenses of paying workers who are directly involved in the production of goods or services.

Factory Overhead

All indirect costs associated with the manufacturing process, including utilities, depreciation, and wages for support staff that are not directly involved in production.

Direct Labor

The cost of wages and benefits for workers who are directly involved in the production of goods or the provision of services.