Question
You own one call option with an exercise price of $30 on Nadia stock. This stock is currently selling for $27.80 a share but is
You own one call option with an exercise price of $30 on Nadia stock. This stock is currently selling for $27.80 a share but is expected to increase to either $28 or $34 a share over the next year. The risk-free rate of return is 5 percent. What is the current per share value of your option if it expires in one year?
| A. | $.95 | |
| B. | $.92 | |
| C. | $.89 | |
| D. | $.79 | |
| E. | $.76 |
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Investment Analysis and Portfolio Management
Authors: Frank K. Reilly, Keith C. Brown
10th Edition
538482109, 1133711774, 538482389, 9780538482103, 9781133711773, 978-0538482387
