Multiple Choice
A firm has stock outstanding with a current price of $35 per share. The price in one period is expected to be either $40 or $48. A call option on ONE share is available with an exercise price of $30. If the risk-free rate of interest is 6%, what would you pay for the call option?
A) $6.29
B) $6.50
C) $6.70
D) $7.09
E) $7.27
Correct Answer:
Verified
Correct Answer:
Verified
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