A Stock Is Selling for $31

question 19

Multiple Choice

A stock is selling for $31. There is a call option on the stock with an exercise price of $27. What is the approximate minimum value of the call option?

• A) $0
• B) $4
• C) $27
• D) $31

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Definitions:

New Business

A venture that has been recently established, entering its initial operational stage in the marketplace.

Valuation

The process of determining the present value of an asset or a company based on earnings, market value, or other methods.

Tangible Assets

Physical assets that have value and exist in a physical form, such as machinery, buildings, and inventory.

Family Business

A commercial organization in which decision-making is influenced by multiple generations of a family who are often tied by blood or marriage.