The Current Stock Price of International Paper Is $69 and the Stock

question 36

Multiple Choice

The current stock price of International Paper is $69 and the stock does not pay dividends. The instantaneous risk free rate of return is 10%. The instantaneous standard deviation of International Paper's stock is 25%. You wish to purchase a call option on this stock with an exercise price of $70 and an expiration date 73 days from now.
-Using the Black-Scholes OPM,the call option should be worth __________ today.

• A) $2.50
• B) $2.94
• C) $3.26
• D) $3.50

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Definitions:

Discriminatory Act

A discriminatory act involves unfair or prejudiced treatment of individuals based on certain characteristics, such as race, age, or gender, which is prohibited under various laws.

Prima Facie Case

A prima facie case is the establishment of a legally required rebuttable presumption, demonstrating enough evidence to support a particular proposition unless disproved by further evidence.

Disparate-Treatment Discrimination

A form of discrimination where an individual is treated less favorably than others because of a protected characteristic such as race, sex, or religion.

Illegal Discharge

The unauthorized release of pollutants or contaminants into the environment, often violating environmental protection laws.