An Option with a Strike Price of $90 Sells for $6.67

question 79

Multiple Choice

An option with a strike price of $90 sells for $6.67 and has a delta of 0.55. If the underlying stock price increases from $90 to $90.68, what is the new price of the call?

• A) $7.35
• B) $6.83
• C) $7.04
• D) $6.95
• E) $7.17

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Definitions:

Negative

Refers to amounts, values, or directions less than zero, often indicating deficit or loss in financial and scientific contexts.

Marginal Utility

The additional satisfaction or utility gained from consuming one more unit of a good or service, which typically decreases with each additional unit consumed.

Total Utility

The total satisfaction or benefit received by consuming a specific quantity of a good or service.

Units of Utility

A measure of satisfaction or pleasure that a consumer receives from consuming a product or service.