A Stock with a Current Price of $40 Will Either

question 50

Multiple Choice

A stock with a current price of $40 will either move up to $41 or down to $39 over the next period.The risk-free rate of interest is 2.45 percent.What is the value of a call option with a strike price of $40?

• A) $0.49
• B) $0.68
• C) $0.86
• D) $0.97
• E) $1.21

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Definitions:

Female Birds

The sex in birds responsible for laying eggs; often characterized by less vibrant plumage compared to males in many species.

Strong Attack

An intense and aggressive action or argument aimed at defeating or undermining someone or something.

Common Belief

A widely held view or opinion that is accepted by a majority within a society.

Influenced

Being affected or altered in one's behavior, thoughts, or actions due to the effect of external forces or individuals.