A Stock Is Trading at $20

question 25

Multiple Choice

A stock is trading at $20.A one-month call with a strike of 19 is valued at $1.439 and has a rho of 1.09.An increase in interest rates of 10 basis points changes the call value to,approximately,

• A)1.440
• B)1.450
• C)1.548
• D)2.529

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Definitions:

Journal

A detailed record where all financial transactions of a business are initially recorded before being transferred to accounts in the general ledger.

Ledger

A comprehensive collection of all accounts and their transactions used in the accounting system of a business.

Chart

In finance and accounting, often refers to graphical representations of data, such as financial charts for analysis.

Accounts

Records within financial accounting that are used to track financial transactions and positions in various categories, such as assets, liabilities, equity, revenue, and expenses.