An Analyst Wants to Use the Black-Scholes Model to Value

question 13

Multiple Choice

An analyst wants to use the Black-Scholes model to value call options on the stock of Heath Corporation based on the following data:
∙The price of the stock is $40.
∙The strike price of the option is $40.
∙The option matures in 3 months (t = 0.25) .
∙The standard deviation of the stock's returns is 0.40,and the variance is 0.16.
∙The risk-free rate is 6%.
Given this information,the analyst then calculated the following necessary components of the Black-Scholes model:
∙d₁ = 0.175
∙d₂ = −0.025
∙N(d₁) = 0.56946
∙N(d₂) = 0.49003
N(d₁) and N(d₂) represent areas under a standard normal distribution function.Using the Black-Scholes model,what is the value of the call option?

• A) $2.81
• B) $3.12
• C) $3.47
• D) $3.82
• E) $4.20

Understand the function and types of restriction enzymes, including their cutting patterns.

Grasp the principles and methods involved in making transformations in genetic engineering, such as electroporation.

Recognize factors influencing gene expression in various host cell types.

Identify the role of essential tools in genetic engineering, such as plasmids, vectors, and DNA ligase.

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