You Own One Call Option with an Exercise Price of $30

question 20

Multiple Choice

You own one call option with an exercise price of $30 on Nadia Interiors stock. This stock is currently selling for $27.80 a share but is expected to increase to either $28 or $34 a share over the next year. The risk-free rate of return is 5% and the inflation rate is 3%. What is the current value of your option if it expires in one year?

• A) $0.76
• B) $0.79
• C) $0.89
• D) $0.92
• E) $0.95

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Definitions:

Generalized Seizures

Seizures that involve both hemispheres of the brain and are characterized by widespread electrical discharges.

Neuroprotectants

Substances that are capable of preserving nerve cells from damage or degeneration.

Onset of Seizures

The initiation or beginning phase of a seizure, marked by sudden, abnormal electrical activity in the brain, leading to various physical symptoms.

Chronic Traumatic Encephalopathy (CTE)

A brain condition associated with repeated head injuries leading to long-term neurodegenerative issues.