Assume That the Current Price of DEY Stock Is $27

question 6

Multiple Choice

Assume that the current price of DEY stock is $27.50, that a 6 month call option on the stock has a strike or exercise price of $25.50, the risk free rate is 4%, and that you have calculated N(d1) as .5476 and N(d2) as .4432. Use the Black-Scholes model to calculate the price of the option.

• A) $1.74
• B) $4.20
• C) 1.98
• D) ($2.50)

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Definitions:

Miracle Tonics

Alleged remedies or medicines with exaggerated promises of curing health issues, often lacking scientific basis.

Foot-In-The-Door Technique

A persuasion strategy where the persuader starts with a small request and, once complied with, escalates to a larger request.

Highball Technique

A strategy often used in negotiations where an extremely high initial offer is made to reset the negotiation boundaries.

Attributional Tendencies

The habitual ways a person explains the causes of their own and others' behaviors and events.