A Stock with a Current Price of $38 Will Either

question 26

Multiple Choice

A stock with a current price of $38 will either move up to $45.00 or down to $35 over the next period. The risk-free rate of interest is 3 percent. What is the value of a call option with a strike price of $40?

• A) $1.30
• B) $1.55
• C) $1.87
• D) $2.09
• E) $2.41

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A citation style and format for academic documents such as scholarly journal articles and books, stands for American Psychological Association.

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A federal or state official who conducts hearings and makes decisions on disputes involving administrative law.

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An independent agency of the United States government, established in 1914 to prevent anticompetitive, deceptive, and unfair business practices.

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U.S. legislation that promotes the use of alternative dispute resolution processes, such as arbitration and mediation, in the administrative process of federal agencies.