A Stock Is Currently Selling for $28 a Share

question 323

Multiple Choice

A stock is currently selling for $28 a share. The risk-free rate is 4.5 percent and the standard deviation is 35 percent. What is the value of d1 of a 3-month call option with a strike price of $25?

• A) .4207
• B) .5413
• C) .6488
• D) .7479
• E) .7994

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Definitions:

Explanation

A statement or account that makes something clear by describing the relevant structure or operation, or circumstances.

Argument

A reason or set of reasons given in support of an idea, action, or theory.

Premises

Statements or propositions from which another statement is conclusively deduced or inferred.

City

A large and densely populated urban area, typically featuring complex systems for sanitation, utilities, land usage, housing, and transportation.