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

question 11

Multiple Choice

You currently own a one-year call option on Rail Company,Inc.,stock.The current stock price is $52.75 and the risk-free rate of return is 4.25 percent.Your option has a strike price of $50 and you assume the option will finish in the money.What is the current value of your call option?

• A)$1.20
• B)$2.59
• C)$4.79
• D)$5.13
• E)$7.27

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Definitions:

Individual Differences

Variations among individuals in their behavior, cognition, personality, or physical functioning, often studied in psychology to understand human diversity.

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