A Stock with a Current Price of $25 Will Either

question 19

Multiple Choice

A stock with a current price of $25 will either move up to $32 or down to $20 over the next period. The risk-free rate of interest is 3.5%. What is the value of a call option with a strike price of $30?

• A)$.68
• B)$.74
• C)$.95
• D)$1.12
• E)$1.31

---

Definitions:

Trapezius

A large, triangular muscle extending over the back of the neck and shoulders, involved in moving, rotating, and stabilizing the scapula (shoulder blade) and extending the neck.

Pronator Teres

A muscle in the forearm that helps rotate the forearm into a palm-down position.

Brachialis

A muscle located in the upper arm that is involved in flexing the elbow joint.

Supinator

A muscle located in the forearm that rotates the forearm and hand outward, allowing the palm to face upwards.