Ima Greedy, the CFO of Financial Saving Techniques has been granted options on 200,000 shares. The stock is currently trading at $22 a share and the options are at the money. The volatility of the stock has been about.20 on an annual basis over the last several years. The option mature in 3 years and the risk free rate is 4%. What is the value of a call option?
A) $3.14
B) $5.86
C) $4.26
D) $5.62
E) $6.16

Question

Quizplus · Accepted Answer

The Answer of Ima Greedy, the CFO of Financial Saving Techniques has been granted options on 200,000 shares. The stock is currently trading at $22 a share and the options are at the money. The volatility of the stock has been about.20 on an annual basis over the last several years. The option mature in 3 years and the risk free rate is 4%. What is the value of a call option?
A) $3.14
B) $5.86
C) $4.26
D) $5.62
E) $6.16

Ima Greedy, the CFO of Financial Saving Techniques Has Been