A Futures Price Is Currently 40 Cents

question 8

Multiple Choice

A futures price is currently 40 cents.It is expected to move up to 44 cents or down to 34 cents in the next six months.The risk-free interest rate is 6%.What is the value of a six month call option with a strike price of 39 cents?

• A) 5.00 cents
• B) 2.91 cents
• C) 3.00 cents
• D) 4.21 cents

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Definitions:

Cross-Race Costumes

Dressing up in a costume that represents a person from a different racial or ethnic background, often discussed in contexts of cultural sensitivity and appropriation.

Subverting Racism

Actions or strategies aimed at undermining or challenging systemic racism and its underlying beliefs.

Prejudice

An unjustified or incorrect attitude (usually negative) towards an individual based solely on the individual's membership of a social group.

Discrimination

Unjust or prejudicial treatment of different categories of people, especially on the grounds of race, age, or sex.