You Currently Own a One-Year Call Option on Way-One,Inc

question 44

Multiple Choice

You currently own a one-year call option on Way-One,Inc. stock. The current stock price is $26.50 and the risk-free rate of return is 4%. Your option has a strike price of $20 and you assume that it will finish in the money. What is the current value of your call option?

• A) $6.25
• B) $6.50
• C) $6.76
• D) $7.13
• E) $7.27

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