The common stock of Winsson, Inc. is currently priced at $52.50 a share. One year from now, the stock price is expected to be either $54 or $60 a share. The risk-free rate of return is 4%. What is the value of one call option on Winsson stock with an exercise price of $55? a)$.39 b)$.41 c)$.45 d)$.48 e)$.51

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The common stock of Winsson, Inc. is currently priced at $52.50 a share. One year from now, the stock price is expected to be either $54 or $60 a share. The risk-free rate of return is 4%. What is the value of one call option on Winsson stock with an exercise price of $55? a)$.39 b)$.41 c)$.45 d)$.48 e)$.51

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Aswer :

D) $ .48

stock of Winsson, Inc. is currently priced at $52.50 a share

stock price is expected to be either $54 or $60 a share one year later

.The risk-free rate of return is 4%.

By using all the information if we calculate option on winsson stock the answer will be $ .48

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