A Stock Is Selling for $32

question 21

Multiple Choice

A stock is selling for $32.70.The strike price on a call,maturing in 6 months,is $35.The possible stock prices at the end of 6 months are $39.50 and $28.40.If interest rates are 6.0%,what is the option price?

• A) $1.90
• B) $2.80
• C) $3.40
• D) $4.20

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Definitions:

Connection

A relationship or bond between individuals or entities that facilitates communication, interaction, or cooperation.

Psychological Capital

A positive psychological state characterized by aspects like self-efficacy, optimism, resilience, and hope, which contributes to an individual’s performance and well-being.

Self-Efficacy

Refers to an individual's belief in their ability to complete tasks or achieve goals.

Resilience

The ability to bounce back or rebound from adversity and setbacks to attain success.