A Call Option with a $50 Strike Price on Bavarian

question 87

Multiple Choice

A call option with a $50 strike price on Bavarian Sausage stock will expire in one year.If you know that the risk free rate is 4%,that the stock currently sells at $47 and the put on the same stock has a value of $2.75,what is the price of the call?

• A) $2.75
• B) $3.56
• C) $1.67
• D) $5.36

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