Assume We Have a Stock Currently Worth $50

question 113

Multiple Choice

Assume we have a stock currently worth $50. We also assume the interest rate is zero, and we can buy options for this stock with a strike price of $50. If the stock can rise or fall by $10 with equal probability over the option period, and the option cannot be exercised until the expiration date, what is the time value of the option?

• A) $5
• B) $10
• C) $50
• D) $40

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Definitions:

Oblique Section

A type of anatomical slice or section that is cut at an angle to the main axis of an organ or part of the body, providing a view that is between transverse and longitudinal.

Histological Sections

Histological sections are thin slices of tissue prepared for examination under a microscope to study the microanatomy of cells and tissues.

Tissue

Groups of cells with similar structures and functions that work together to perform specific activities in the body.

Keratinized

Keratinized refers to cells, especially those in the skin, nails, and hair, that become filled with keratin protein, providing a tough and protective property.