The Price of Time Squared Corp

question 58

Multiple Choice

The price of Time Squared Corp.stock will be either $80 or $95 at the end of the year.Call options are available with one year to expiration.T-bills currently yield 6 percent and the current price of Time Squared Corp.stock is $85.What is the value of a call option if the exercise price is $75 per share?

• A)$14.25
• B)$15.06
• C)$18.78
• D)$24.25
• E)$25.06

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Definitions:

RULLCA

An abbreviation for the Revised Uniform Limited Liability Company Act, which provides a legal framework for the formation and operation of LLCs in jurisdictions that have adopted it.

Interest

The cost of borrowing money, typically expressed as a percentage of the principal, or the income generated from an investment.

Dissociation

The process of a member withdrawing from a partnership or a member's interest being terminated, affecting the relationship between the members of a business entity.

Manager-Managed LLC

A limited liability company where the daily operations are overseen by appointed managers rather than all members.