45. You are evaluating a stock selling for $30 per share. Over the investment period (1 year) you think that the stock might go as low as $20 or as high as $40. The relevant interest rate is 6% (you can borrow or lend at this rate) There is a call option (European) available with an exercise price of $35. What would the price of one call be given this information? (closest to) A) )$9.06 B)$2.78 C)$2.82 D)$4.12
45. You are evaluating a stock selling for $30 per share. Over the investment period (1 year) you think that the stock might go as low as $20 or as high as $40. The relevant interest rate is 6% (you can borrow or lend at this rate) There is a call option (European) available with an exercise price of $35. What would the price of one call be given this information? (closest to) A) )$9.06 B)$2.78 C)$2.82 D)$4.12
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:45. You are evaluating a stock selling for $30 per share. Over the investment period (1 year)
you think that the stock might go as low as $20 or as high as $40. The relevant interest rate
is 6% (you can borrow or lend at this rate)
There is a call option (European) available with an exercise price of $35. What would
the price of one call be given this information? (closest to)
A) )$9.06 B)$2.78 C)$2.82
D)$4.12
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