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

Analyze the consequences of vertical and horizontal contracts on market dynamics and pricing.

Comprehend the antitrust risks and enforcement related to vertical and horizontal relationships.

Examine the strategic considerations in acquiring suppliers or customers to enhance profitability.

Explore the concept of synergetic value in mergers and acquisitions.

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