Shares of a Stock Are Currently Priced at $28

question 286

Multiple Choice

Shares of a stock are currently priced at $28. The future price is expected to be either $27 or $32. The risk-free rate of return is 5%. What is the value of a twelve-month $25 call option?

• A) $3.00
• B) $3.19
• C) $4.00
• D) $4.19
• E) $8.19

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Definitions:

Manic Episode

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Obsessive-Compulsive Disorder

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Panic Attack

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A device or container designed for storing and dispensing ketchup.