Consider This Graph of a Call Option

question 79

Multiple Choice

Consider this graph of a call option.The option is a three-month American call option on €62,500 with a strike price of $1.50 = €1.00 and an option premium of $3,125.What are the values of A,B,and C,respectively?

• A)A = $3,125 (or $.05 depending on your scale); B = $1.50; C = $1.55
• B)A = €3,750 (or €.06 depending on your scale); B = $1.50; C = $1.55
• C)A = $.05; B = $1.55; C = $1.60
• D)none of the options

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Definitions:

Unemployment Rates

The percentage of the labor force that is jobless and actively seeking employment, often used as an indicator of the health of an economy.

Unemployment Benefits

Financial payments made by the government to individuals who are unemployed and seeking work.

Labor Force

The labor force comprises all individuals above a certain age who are either employed or actively seeking employment, representing the available workforce for an economy.

Discouraged Workers

Discouraged workers are individuals who are not actively seeking employment due to believing that no jobs are available for them or that they would not qualify for those that are.