A Futures Price Is Currently 40 Cents

question 8

Multiple Choice

A futures price is currently 40 cents.It is expected to move up to 44 cents or down to 34 cents in the next six months.The risk-free interest rate is 6%.What is the value of a six month call option with a strike price of 39 cents?

• A) 5.00 cents
• B) 2.91 cents
• C) 3.00 cents
• D) 4.21 cents

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Definitions:

Antagonistic Pleiotropy

A genetic phenomenon where one gene influences multiple traits in a way that is beneficial to one trait but detrimental to another.

S Allele

A specific version of a gene, often referring to those determining self-incompatibility in plants, which helps prevent self-fertilization and promotes genetic diversity.

Immunity

The ability of an organism to resist harmful microorganisms or viruses through the detection and response by the immune system.

Virulence

A measure of the severity of a pathogenic organism's effect on its host.