A 6-Month Call Option on ABC Stock Is Priced at $3.60.The

question 50

Multiple Choice

A 6-month call option on ABC stock is priced at $3.60.The call option delta is 0.76.How will the approximate call option price be computed if the underlying stock price increases by $1?

• A)$3.60
• B)$3.60 - $0.76
• C)$3.60 + $0.76
• D)$3.60 × .76
• E)$3.60 × (1 + .76)

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Definitions:

Target Margin

A predefined profit goal set by a company for a product, project, or the entire organization to achieve within a specific timeframe.

Target Price

Target price is the anticipated selling price of a product or service, set by a company, that reflects its market position and is intended to attract its identified target market.

Allowable Cost

This refers to the maximum cost that can be incurred on a project while still achieving the desired level of profit or meeting budget constraints.

Upstream Costs

Expenses incurred in the early stages of a product's life cycle, such as exploration and development costs in the oil and gas industry.