Consider a Call Option with a Strike Price of $10

question 106

Multiple Choice

Consider a call option with a strike price of $10, which expires in one year. The risk-free rate of interest is 10 percent. The current underlying stock price is $30. Without arbitrage, which of the following is a possible price for the call option? (Round intermediate computations to two decimal places.)

• A) $0
• B) $19.50
• C) $21.00
• D) $19.00

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