You Currently Own a One-Year Call Option on Caspian Way

question 184

Multiple Choice

You currently own a one-year call option on Caspian Way stock. The current stock price is $38.70 and the risk-free rate of return is 3.85 percent. Your option has a strike price of $37.50 and you
Assume the option will finish in the money. What is the current value of your call option?

• A) $1.20
• B) $2.59
• C) $3.07
• D) $5.13
• E) $7.27

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