The Six-Month At-The-Money European Call Option on a Stock Worth

question 17

Multiple Choice

The six-month at-the-money European call option on a stock worth $25 is priced at $5. The rate of interest is 2%. The put is priced at $7. The dividend paid at the end of three months must be

• A) 1.23
• B) 2.26
• C) 3.83
• D) 4.77

---

Definitions:

News Release

A written statement issued to the media to announce something of interest, such as a new product, event, or piece of information.

Background Information

Essential context or facts needed to fully understand a topic or situation.

Good News

Information or a message that is positive, reassuring, or that brings joy or happiness.

Mood Swings

Rapid and intense changes in emotional state, which can be characteristic of certain psychological conditions.