A 4-Month,$25 Call Option on Teller Stock Has an Option

question 3

Multiple Choice

A 4-month,$25 call option on Teller stock has an option premium of $0.25.The 4-month,$25 put option has an option premium of $0.80.The risk-free rate is 3 percent.The options are European-style.What is the price of Teller stock?

• A) $24.20
• B) $24.53
• C) $24.62
• D) $25.97
• E) $26.08

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Definitions:

Thomas Jefferson

An American Founding Father, the principal author of the Declaration of Independence, and the third President of the United States, also known for his contributions to architecture.

Neoclassical Artworks

Refers to art inspired by the ancient Greek and Roman styles, characterized by harmony, simplicity, and proportion, popular in the late 18th and early 19th centuries.

Marble Sculpture

A form of art where artists carve shapes, figures, and designs from marble.

Jean-Antoine Houdon

A renowned French sculptor famous for his lifelike busts and statues of prominent figures of the Enlightenment, including Voltaire and George Washington.