Marianne Walsh Bought XYZ Corporation Stocks for $26 a Share

question 47

Multiple Choice

Marianne Walsh bought XYZ Corporation stocks for $26 a share at the beginning of 2019.At year-end, she received a dividend of $1.75 per share and then sold the stock for $30.50 a share.What was Marianne's annual shareholder return on the investment?

• A)6.25 percent
• B)10.83 percent
• C)17.31 percent
• D)20.49 percent
• E)24.04 percent

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Definitions:

Black-Scholes OPM

The Black-Scholes Option Pricing Model, a foundational model for pricing European options, calculating the theoretical price of options by estimating future volatility.

Instantaneous Risk-free Rate

The theoretical return of an investment with no risk of financial loss, assumed to exist at a single point in time.

Standard Deviation

A statistical measure that quantifies the amount of variation or dispersion of a set of data values.

Call Option's Value

The value of a call option is determined by the difference between the stock price and the strike price, adjusted for time until expiration and volatility.