Mike Was Granted Stock Options on 10,000 Shares of His

question 17

Multiple Choice

Mike was granted stock options on 10,000 shares of his employer's stock. The stock is currently selling for $53.93 a share and has a standard deviation of 18%. The option's strike price is $52.39 and the time to maturity is 5 years. What is the value of each option given a risk-free rate of 1.2%? Assume that no dividends are paid.

• A)$8.59
• B)$8.93
• C)$10.73
• D)$12.39
• E)$14.35

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Definitions:

Catastrophe

A sudden and widespread disaster that causes great damage or suffering, often natural but can also be human-made.

Professionalization

The process by which an occupation transforms into a more formal profession, often acquiring specific qualifications, ethical standards, and a higher status.

Medical Model

A theory or approach that treats mental or physical illnesses primarily through the use of drugs, surgery, or other medical interventions, focusing on treating symptoms rather than underlying social or psychological issues.

Diagnosis

The process of identifying a disease, condition, or injury from its symptoms and signs through examination, testing, and analysis.