What Is the Price of a $25 Strike Call? Assume

question 12

Multiple Choice

What is the price of a $25 strike call? Assume S = $23.50,σ = 0.24,r = 0.055,the stock pays a 2.5% continuous dividend and the option expires in 45 days?

• A) $0.60
• B) $0.50
• C) $0.40
• D) $0.30

---

Definitions:

Expense Accounts

These accounts are used to track the money spent or costs incurred in a company's operations.

Sales Discount

A reduction in the price charged to customers, typically given in exchange for prompt payment.

Discount Period

The discount period refers to the time frame in which a payment can be made at a reduced rate, typically in the context of early payment incentives to debtors.

Primary Source

Original documents or evidence directly associated with a subject or event under investigation, used in research.