The delta of a call option on a firm's assets is 0.727.This means that a $195,000 project will increase the value of equity by:
A)$141,765.
B)$180,219.
C)$211,481.
D)$264,909.
E)$268,226.

Name: The delta of a call option on a firm's assets is 0.727.This means that a $195,000 project will increase the value of equity by: A)$141,765. B)$180,219. C)$211,481. D)$264,909. E)$268,226.
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Question

Quizplus · Accepted Answer

Increase in equity value = $195,000 × 0.727 = $141,765

The Delta of a Call Option on a Firm's Assets