A Call Option Matures in Nine Months

question 6

Multiple Choice

A call option matures in nine months. The underlying stock price is $95, and the stock's return has a standard deviation of 19 percent per year. The risk-free rate is 3 percent per year, compounded continuously. The exercise price is $0. What is the price of the call option?

• A)$15.97
• B)$52.14
• C)$56.37
• D)$92.23
• E)$95.00

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Definitions:

Arbitrary Or Fanciful

Describes trademarks that are entirely invented or have no direct connection to the product or service they represent.

Generic Terms

Common words or phrases not protected by trademark as they refer to general classes of products or services rather than to distinguishable goods or services of a particular source.

Trademarks

Identifiable signs, logos, or names that distinguish products or services to protect the brand's identity.

Lanham Act Of 1947

A federal statute that governs trademarks, service marks, and unfair competition, providing protection for brands and consumers in the United States.