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A Call Option with a $50 Strike Price on Bavarian

Question 9

Multiple Choice

A call option with a $50 strike price on Bavarian Sausage stock will expire in one year.If you know that the risk free rate is 4%,that the stock currently sells at $47 and the put on the same stock has a value of $2.75,what is the price of the call?


A) $2.75
B) $3.56
C) $1.67
D) $5.36

Correct Answer:

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