An American-Style Call Option with Six Months to Maturity Has

question 56

Multiple Choice

An American-style call option with six months to maturity has a strike price of $35. The underlying stock now sells for $43. The call premium is $12. If the option has delta of .5, what is its elasticity?

• A) 4.17
• B) 2.32
• C) 1.79
• D) 0.5
• E) 1.5

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Definitions:

Collective Bargaining

The negotiation process involving management and worker unions aiming to establish agreements on salary scales, conditions of employment, benefits, and other components of labor compensation and rights.

Labor-Management Relations

The interaction between employees or their representatives (often unions) and management in the workplace, focusing on the negotiation and application of work terms.

Rail

A mode of land transport involving trains traveling on tracks, typically used for carrying goods and passengers.

Yellow Dog Contract

An employment agreement where the worker promises not to join a labor union during the term of employment, now illegal in many jurisdictions.