A Stock with a Current Price of $25 Will Either

question 40

Multiple Choice

A stock with a current price of $25 will either move up to $32 or down to $20 over the next period.The risk-free rate of interest is 3.5 percent.What is the value of a call option with a strike price of $30?

• A) $0.61
• B) $0.72
• C) $0.93
• D) $1.11
• E) $1.36