The Current Price of a Stock Is $100

question 31

Multiple Choice

The current price of a stock is $100.What is the Black-Scholes model price of a six-month call option at strike $101,given an interest rate of 2% and a dividend rate of 1%? The volatility is 25%.

• A)$6.30
• B)$6.52
• C)$6.56
• D)$6.78

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Definitions:

Cost of Goods Purchased

The total expenses incurred to acquire inventory that is intended for resale.

Beginning Inventory

The value of a company's inventory at the start of an accounting period, serving as a basis for calculating cost of goods sold.

Specific Identification

An inventory costing method where the cost of each specific item in inventory is identified and assigned to that item.

Actual Costs

Expenses that have been incurred and recorded, contrasting with estimated or projected costs.