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What Is the Call Option Premium Given the Following Information

Question 55

Multiple Choice

What is the call option premium given the following information?
 Stock price $50 Call strike price $45 Volatility (std dev)  15% Time (years)  .25 Risk-free rate 2.00% Dividend yield 0%\begin{array}{lc}\text { Stock price } & \$50 \\\text { Call strike price } & \$ 45\\\text { Volatility (std dev) } & 15\% \\\text { Time (years) } & .25 \\\text { Risk-free rate } & 2.00\% \\\text { Dividend yield } & 0\%\end{array}


A) $4.86
B) $5.04
C) $5.16
D) $5.34
E) $5.50

Correct Answer:

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