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The Common Stock of Winsson, Inc

Question 111

Multiple Choice

The common stock of Winsson, Inc. is currently priced at $52.50 a share. One year from now, the stock price is expected to be either $54 or $60 a share. The risk-free rate of return is 4 percent. What is the value of one call option on Winsson stock with an exercise price of $55?


A) $.39
B) $.41
C) $.45
D) $.48
E) $.51

Correct Answer:

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