Multiple Choice
The current stock price of Howard & Howard is $64, and the stock does not pay dividends. The instantaneous risk-free rate of return is 5%. The instantaneous standard deviation of H&H's stock is 20%. You want to purchase a call option on this stock with an exercise price of $55 and an expiration date 73 days from now.
Using the Black-Scholes OPM, the call option should be worth ________ today.
A) $0.01
B) $0.08
C) $9.26
D) $9.62
Correct Answer:

Verified
Correct Answer:
Verified
Q52: In order for a binomial option price
Q53: A high dividend payout will _ the
Q54: Suppose you purchase a call and write
Q55: You calculate the Black-Scholes value of a
Q56: If you have an extremely "bullish" outlook
Q58: A stock with a stock and exercise
Q59: The stock price of Harper Corp. is
Q60: A stock with a current market price
Q61: The practice of using options or dynamic
Q62: Research conducted by Rubinstein (1994) suggests that