You currently own a one-year call option on Way-One,Inc. stock. The current stock price is $26.50 and the risk-free rate of return is 4%. Your option has a strike price of $20 and you assume that it will finish in the money. What is the current value of your call option?
A) $6.25
B) $6.50
C) $6.76
D) $7.13
E) $7.27

Question

Quizplus · Accepted Answer

The Answer of You currently own a one-year call option on Way-One,Inc. stock. The current stock price is $26.50 and the risk-free rate of return is 4%. Your option has a strike price of $20 and you assume that it will finish in the money. What is the current value of your call option?
A) $6.25
B) $6.50
C) $6.76
D) $7.13
E) $7.27

You Currently Own a One-Year Call Option on Way-One,Inc