A Stock Is Currently Selling for $34 a Share

question 77

Multiple Choice

A stock is currently selling for $34 a share. The risk-free rate is 3.1 percent and the standard deviation is 33 percent. What is the value of d₁ of a 3-month call option with a strike price of $35?

• A) −.01872
• B) −.04621
• C) −.05047
• D) −.02950
• E) −.20356

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Definitions:

Carrot-And-Stick

The carrot-and-stick approach is a motivational technique that combines the promise of reward (carrot) and the threat of punishment (stick) to influence behavior.

Income Redistribution

The transfer of income from some individuals to others by means of a social mechanism such as taxation, charity, welfare, public services, land reform, or monetary policies.

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Individuals in the United States who have African ancestry; commonly referred to as African Americans.

Poor

This term refers to individuals or groups who lack sufficient financial resources to meet a basic standard of living.