A Stock Is Selling for $45

question 26

Multiple Choice

A stock is selling for $45.75, with a call option available at a $40 strike that has a premium of $7.50. What is the intrinsic value of the call?

• A)$.75
• B)$1.75
• C)$5.00
• D)$5.75
• E)$7.50

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Definitions:

Strategic Management Process

A methodical approach involving the formulation and implementation of major initiatives and goals taken by a company's top management on behalf of owners, based on the assessment of internal and external environments.

B2B Strategies

Tactical plans made by businesses to sell products or services directly to other businesses rather than the end consumer.

Supply Chains

Networks connecting suppliers with customers to produce and distribute a specific product, encompassing all stages from raw materials to final delivery.

Related Diversification

A strategy where a business expands its activities into areas that are similar to its existing operations.