Seeing is believing!
Before you order, simply sign up for a free user account and in seconds you'll be experiencing the best in CFA exam preparation.
Basic Question 1 of 8
Assume a stock price is $55 and in the next year it will either rise by 20% or fall by 16%. The risk-free interest rate is 5%. A call option on this stock has an exercise price of $60. What is the price of a call option that expires in one year?
User Contributed Comments 0
You need to log in first to add your comment.
I just wanted to share the good news that I passed CFA Level I!!! Thank you for your help - I think the online question bank helped cut the clutter and made a positive difference.
Edward Liu
Learning Outcome Statements
describe and interpret the binomial option valuation model and its component terms;
describe how the value of a European option can be analyzed as the present value of the option's expected payoff at expiration;
CFA® 2025 Level II Curriculum, Volume 5, Module 32.