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All Else Constant, Which One of the Following Situations Will

Question 21

Multiple Choice

All else constant, which one of the following situations will produce the highest call price given a strike price of $27.50?


A) $25 stock price; 15% standard deviation
B) $25 stock price; 30% standard deviation
C) $30 stock price; 15% standard deviation
D) $30 stock price; 30% standard deviation
E) Insufficient information is provided to answer this question.

Correct Answer:

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