A Call Option with an Exercise Price of $50 Expires

question 27

Multiple Choice

A call option with an exercise price of $50 expires in six months, has a stock price of $54, and has a standard deviation of 80 percent.The risk-free rate is 9.2 percent per year annually compounded.Calculate the value of d1.

• A)0.3
• B)0.7214
• C)-0.7214
• D)0.4967

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Definitions:

Anthropocentric

Refers to a viewpoint that considers human beings as the central or most significant species on the planet, often at the expense of the environment or other species.

Sociotechnical Systems

An approach considering the interaction between people and technology in workplaces, emphasizing the importance of both social and technical elements in designing systems.

Telecommuting

A work arrangement where employees do not commute to a central place of work, using telecommunication and information technology to perform their job remotely.

Reduced Absenteeism

A decrease in the frequency of employees failing to report for work as scheduled, benefiting both productivity and morale.