Question
XYZ, Inc. stock is currently trading for $47 and will either rise to $49 or fall to $44 in one year. The risk-free rate for
XYZ, Inc. stock is currently trading for $47 and will either rise to $49 or fall to $44 in one year. The risk-free rate for one year is 6 percent. You own a call option with a strike price of $32, which expires in one year. What is the value of your call option? (Do not round intermediate computations. Round final answer to two decimal places.)
| a. | $0 | |
| b. | $5.27 | |
| c. | $10.05 | |
| d. | $16.81 |
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Personal Finance
Authors: Thomas Garman, Raymond Forgue
12th edition
9781305176409, 1133595839, 1305176405, 978-1133595830
