Exhibit 13-6
USE THE FOLLOWING INFORMATION TO ANSWER THE NEXT

question 122

Multiple Choice

Exhibit 13-6
USE THE FOLLOWING INFORMATION TO ANSWER THE NEXT QUESTION(S)
The current stock price of ABC Corporation is $53.50. ABC Corporation has the following put and call option prices that expire 6 months from today. The risk-free rate of return is 5% and the expected return on the market is 11%. $\begin{array}{ccc}\text { Exercise Price } & \text { Put Price } & \text { Call Price } \\\hline50 & \$ 1.50 & \$ 5.75 \\55 & \$ 3.25 & \ldots\end{array}$
-Refer to Exhibit 13-6. What should the price be of a call option that expires 6 month from today with a exercise price of $55?

• A) $1.33
• B) $3.08
• C) $4.58
• D) $6.07
• E) $6.33