You Own One Call Option with an Exercise Price of $30

question 20

Multiple Choice

You own one call option with an exercise price of $30 on Nadia Interiors stock. This stock is currently selling for $27.80 a share but is expected to increase to either $28 or $34 a share over the next year. The risk-free rate of return is 5% and the inflation rate is 3%. What is the current value of your option if it expires in one year?

• A) $0.76
• B) $0.79
• C) $0.89
• D) $0.92
• E) $0.95

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Definitions:

Creativity In Management

Creativity in Management involves applying innovative and creative thinking to solve problems, make decisions, and develop new strategies to enhance organizational performance.

Unique Approach

A method or strategy that is distinctively different from others and not commonly used.

Creative People

Individuals known for their ability to generate new ideas, solutions, or artistic expressions, often contributing to innovation and problem-solving across various domains.

Think Outside The Box

Adopting an innovative and unconventional approach to problem-solving or creativity.