Bruno's Stock Is Currently Selling for $31

question 50

Multiple Choice

Bruno's stock is currently selling for $31.74 a share but is expected to increase to either $32 or $37 a share over the next year.The risk-free rate is 3 percent.What is the current value of a 1-year call option with an exercise price of $35?

• A)$)27
• B)$)33
• C)$)64
• D)$)89
• E)$)52

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Definitions:

Vascular Disease

A class of diseases of the blood vessels, often leading to a reduced flow of blood to organs and tissues.

Fungal Infection

An infection caused by fungi, ranging from superficial skin conditions to more serious systemic infections.

Ringworm

A fungal infection of the skin, characterized by ring-shaped, red, itchy patches.

Scaly

Characterized by or covered with scales.