The Delta of a Call Option on a Firm's Assets

question 7

Multiple Choice

The delta of a call option on a firm's assets is .624. How much will a project valued at $48,000 increase the value of equity?

• A) $18,048
• B) $45,336
• C) $29,952
• D) $76,923
• E) $32,189

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Definitions:

Redundancy

The use of components in parallel to raise reliability.

Infant Mortality

Infant mortality is the statistical measure of the number of deaths of infants under one year old per 1,000 live births.

Reliability

The degree to which a system, component, or process performs its required functions under stated conditions for a specified period of time.

Components In Series

An electrical configuration where components are connected along a single path, so the same current flows through all of them.