A Call Option Has an Exercise Price of $30

question 9

Multiple Choice

A call option has an exercise price of $30.The stock price at a point on the binomial tree is $36.24.The calculated present value of the option at that same point is $5.86.What figure should be used to calculate option prices at points moving toward the final price?

• A) $5.86
• B) $6.24
• C) $6.62
• D) $7.01

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