A Stock Is Currently Priced at $53

question 6

Multiple Choice

A stock is currently priced at $53.80 a share.One year from now,the stock price is expected to be either $54 or $59 a share.The risk-free rate of return is 2 percent.What is the value of a 1-year call option with an exercise price of $55?

• A)$)75
• B)$)81
• C)$)45
• D)$)69
• E)$)51

---

Definitions:

Coherence

The quality of being logical, consistent, and forming a unified whole, often used in relation to texts or theories.

Curiosity

A strong desire to learn or know about something.

Control

The ability to direct, influence, or regulate the behavior of others or the course of events.

Narrative Competence

The ability to understand, interpret, and create stories and narratives, which is essential for effective communication and understanding in various contexts.