What Is the Call Option Premium Given the Following Information

question 29

Multiple Choice

What is the call option premium given the following information?

• A) $5.91
• B) $6.28
• C) $6.75
• D) $6.90
• E) $7.13

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Definitions:

Consolidation

The process of combining the financial statements of several subsidiary companies into the statements of a single parent company, displaying the group's total financial status as a single entity.

Cost Method

An accounting method used to value an investment, where the investment is recorded at its cost and adjustments are only made when there are declines in value or realized returns.

Equity in Earnings

The share of the profits or losses from investments in associates that a company accounts for using the equity method.

FVTPL

Fair Value Through Profit or Loss, a classification under International Financial Reporting Standards for financial assets held for trading or designated upon initial recognition as measured at fair value, with changes in fair value recognized in profit or loss.