A Stock Is Trading at $132 $- 30.53$ the Passage of One Trading Day

question 29

Multiple Choice

A stock is trading at $132. A one-month call with a strike of $125 costs $9.773 and has a theta of $- 30.53$ . The passage of one trading day ( $\approx 0.004$ years) will cause the call value to, approximately,

• A) Rise by \(0.04\) .
• B) Fall by \(0.003\)
• C) Fall by \(0.122\) .
• D) Fall by \(0.04\)

---

Definitions:

Corporate Mergers

The combination of two or more companies into a single corporate entity, with one of the companies surviving and the others ceasing to exist.

Conglomerate Merger

A business combination of two or more companies operating in entirely different industries.

Sherman Act

A landmark U.S. antitrust law passed in 1890 that prohibits monopolistic business practices and promotes fair competition.

Clayton Acts

The Clayton Acts are a series of U.S. antitrust laws enacted in 1914 intended to promote competition and prevent monopolies and unfair business practices.