CUMULATIVE NORMAL DISTRIBUTION TABLE

question 20

Multiple Choice

CUMULATIVE NORMAL DISTRIBUTION TABLE
-Refer to the information above. A stock is currently selling for $42. The stock pays no dividends. An American call option on the stock has a strike price of $45 and has 6 months to
Expiration. The standard deviation of the continuously compounded rate of return of the stock
Is 25%, and the annualized risk-free rate is 3%. Use the Black-Scholes formula to calculate the
Fair value of this option.

• A)$2.33
• B)$2.01
• C)$2.25
• D)The Black-Scholes formula cannot be used to determine the fair value of an American call option.

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Definitions:

Premature Termination

Ending a process or activity earlier than planned or expected, often without achieving the intended goals.

Adjourning Stage

The final phase in group development where the group completes its task, dissolves structures, and members separate, moving on to other things.

Group Development

The stages through which a group goes as it matures, typically starting from formation to performing tasks effectively together.

Empirical Studies

Research based on the collection and analysis of data, typically through observation and experimentation.