The Common Stock of Mercury Motors Is Selling for $43

question 11

Multiple Choice

The common stock of Mercury Motors is selling for $43.90 a share. U.S. Treasury bills are currently yielding 4.5%. What is the current value of a one-year call option on Mercury Motors stock if the exercise price is $37.50 and you assume the option will finish in the money?

• A) $6.12
• B) $6.40
• C) $6.69
• D) $7.67
• E) $8.01

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Definitions:

Unethical Behaviour

Actions or practices that violate social norms, laws, or standards of conduct, often causing harm or disadvantage to others.

Questionable Behaviour

Actions or patterns of actions that raise doubts about morality, legality, or appropriateness, possibly leading to ethical or legal scrutiny.

Discovered

The act of finding something for the first time or uncovering information previously unknown.

Ethical Behaviour

Acting in ways consistent with societal norms and values concerning moral principles, including honesty, fairness, and integrity.