Current value of one call option on stock, Microeconomics

Current value of one call option on stock

The common stock of Trynor's, Inc. is currently priced at $37.90 a share. One year from now, the stock price is expected to be either $38 or $43 a share. The risk-free rate of return is 3.5 percent. What is the current value of one call option on this stock if the exercise price is $40?

a. $0.64

b. $0.71

c. $0.77

d. $0.82

e. $0.91

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Microeconomics: Current value of one call option on stock

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Microeconomics: Current value of one call option on stock

Reference No:- TGS065146

Have a Question? (oR Write a Review)

Recent Questions Asked Microeconomics

Q : Taxable income of the two owners

Q : Find initial endowments by indifference curve edgeworth box

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Request for Solution File

Ask an Expert for Answer!!

Microeconomics: Current value of one call option on stock

Reference No:- TGS065146

Recent Questions Asked Microeconomics

Q : Taxable income of the two owners

Q : Find initial endowments by indifference curve edgeworth box

Q : Period-interest combinations

Q : What is the socially efficient level of output

Q : Current value of one call option on stock

Q : Setting a minimum selling price

Q : Sarah argues that women should make the same amount

Q : What is lisa credit for tax on prior transfers

Q : Find equation linking planned aggregate expenditure output

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