Suppose ACC's stock price is currently $25. In the next six months it will either fall to $15 or rise to $40. What is the current value of a six-month call option with an exercise price of
$20? The six-month risk-free interest rate is 5% (periodic rate). [Use the replicating portfolio method]
A) $20.00
B) $8.57
C) $9.52
D) $13.10

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The Answer of Suppose ACC's stock price is currently $25. In the next six months it will either fall to $15 or rise to $40. What is the current value of a six-month call option with an exercise price of
$20? The six-month risk-free interest rate is 5% (periodic rate). [Use the replicating portfolio method]
A) $20.00
B) $8.57
C) $9.52
D) $13.10

Suppose ACC's Stock Price Is Currently $25