A 6-Month Call Option on Romer Technologies' Stock Has a Strike

question 4

Multiple Choice

A 6-month call option on Romer Technologies' stock has a strike price of $45 and sells in the market for $8.25.Romer's current stock price is $48.What is the exercise value of the option?

• A)$3.00
• B)$3.75
• C)$4.69
• D)$5.86
• E)$7.32

Analyze and solve problems involving inequalities and their applications.

Understand the concept of political risk and how it affects firms' investments in foreign countries.

Distinguish between different financial instruments and markets, such as foreign bonds, Eurobonds, and Eurodollar transactions.

Understand the mechanics and implications of floating versus fixed exchange rate systems.

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Definitions:

Licensing Statute

A legal provision that requires individuals or entities to obtain permission through a license to engage in certain professions or activities.

Enforce Policy

The act of implementing or executing a set of rules or guidelines designed to achieve a specific outcome.

Enforceable Contract

A legally valid contract that can be upheld or imposed in a court of law.

Minor Worker

An individual under the legal age of adulthood who is employed; typically subject to specific regulations regarding work types, hours, and conditions.