You Have Written a Call Option on 1 Share of Z

question 25

Multiple Choice

You have written a call option on 1 share of Z stock that is currently worth $15.You expect the price of the stock to either move to $20 or $10 over the next year.If the one-year risk-free interest rate is 10% and the strike price on the option is $15,what should have been the proceeds of the option?

• A) $5.45
• B) $2.95
• C) $.45
• D) $0

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