The Current Price of a Stock Is $50

question 22

Multiple Choice

The current price of a stock is $50.Every month,the stock price will rise by a factor of 1.2 or fall by a factor of 0.8;and a $1 risk-free investment will be worth $1.03.Dividends are paid as a proportion of 0.02 of the stock price.What is the early-exercise premium on the 49-strike,six-month American call?

• A)$0.00
• B)$0.02
• C)$0.06
• D)$0.11

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Definitions:

National Organization for Women

An American feminist organization founded in 1966 aimed at advocating for equal rights for women in all aspects of society.

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A guarded concrete barrier that physically and ideologically divided Berlin from 1961 to 1989, separating East Berlin and West Berlin during the Cold War.

Voting Rights Act

The Voting Rights Act is landmark U.S. legislation passed in 1965 aimed at overcoming legal barriers at the state and local levels that prevented African Americans from exercising their right to vote.