You Currently Own a One-Year Call Option on Way-One

question 24

Multiple Choice

You currently own a one-year call option on Way-One.The current share price is €26.50 and the risk-free rate of return is 4%.Your option has a strike price of €20 and you assume that it will finish in the money.What is the current value of your call option?

• A)€6.25
• B)€6.50
• C)€6.76
• D)€7.13
• E)€7.27

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Definitions:

Managerial Practice

The customary ways in which managers operate within an organization to achieve its objectives.

Intellectual Capability

Describes a person's mental capacity to reason, plan, solve problems, think abstractly, comprehend ideas and language, and learn.

Diversity

The inclusion of individuals from a variety of backgrounds, perspectives, and experiences, contributing to a rich and heterogeneous environment.

Brainstorming

A group creativity technique designed to generate a large number of ideas for the solution of a problem.