You currently own a one-year call option on Rail Company, Inc., stock. The current stock price is $51.80 and the risk-free rate of return is 4.25 percent. Your option has a strike price of $50 and you assume the option will finish in the money. What is the current value of your call option?
A) $1.20
B) $2.59
C) $3.84
D) $5.13
E) $7.27
Correct Answer:
Verified
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