Given Current Asset Price = $50

question 26

Multiple Choice

Given current asset price = $50
strike price = $50
risk-free rate = 1%
time to expiration of the option = 2 years
N(d₁) = 0.5793
N(d₂) = 0.4602
Based on the Black-Scholes option pricing model,calculate the price of the corresponding call option (round to 2 decimal places) .

• A) $0
• B) $5.49
• C) $5.96
• D) $6.41

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Definitions:

Supply Curve

A graphical representation showing the relationship between the quantity of goods supplied by producers and the price of those goods.

Gardenburgers

This is a brand name for a type of vegetarian burger made from different kinds of grains and vegetables, aiming to simulate the taste and texture of meat burgers.

Supply Curve

A visual diagram that illustrates the connection between a product's price and the amount of the product that sellers are prepared to offer.

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a given price over a specified period.