A Stock with a Current Price of $30 Will Either

question 26

Multiple Choice

A stock with a current price of $30 will either move up to $37 or down to $26 over the next period.The risk-free rate of interest is 2.5 percent.What is the value of a call option with a strike price of $35?

• A)$0.49
• B)$0.68
• C)$0.86
• D)$0.97
• E)$1.21

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Definitions:

Customer Choice

The decision-making process that consumers go through when selecting products or services among several alternatives.

Acquiring a New Customer

The process businesses undergo to gain additional customers or clients who have not previously purchased from the business.

Business Friendship

A relationship between colleagues or professional contacts that combines elements of friendship and business.

Personal Friendship

Personal friendship involves a mutual bond between people who share interests and affection not necessarily based on business or professional interests.