Consider a Stock That Is Trading at $50,has a Volatility

question 11

Multiple Choice

Consider a stock that is trading at $50,has a volatility of 0.5,and pays no dividends.The risk-free rate is 4%.If the beta of the stock is 1.1,what is the beta of a 52-strike,one-year call option on this stock?

• A)0.55
• B)1.1
• C)3.3
• D)4.4

---

Definitions:

Spinothalamic Tract

A sensory pathway originating in the spinal cord that transmits information about pain and temperature to the thalamus in the brain.

Fasciculus Gracilis Tract

A sensory pathway in the spinal cord that conveys information about touch and proprioception from the lower body to the brain.

Spinocerebellar Pathway

A neural pathway that carries information from the spine to the cerebellum, crucial for coordinating movement.

Tectospinal Tract

A neural pathway originating in the midbrain that controls neck and upper limb movements in response to visual stimuli.