Crude oil call option has exercise price

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Reference no: EM132003425

1. You just won the state lottery!!!! The state gives you the choice of $1,000,000 today or a 10-year annuity of $120,000, with the first payment coming one year from today. What rate of return is built into the annuity?

A. 2.00%

B. 1.24%

C. 20.00%

D. 3.46%

E. More information is needed to find the answer

2. A crude oil call option has an exercise price of $40 when its spot price is $44. If the call option is trading at $6.65, what is its intrinsic value?

a. $0

b. $4.00

c. $40.00

d. $44.00

e. $46.65

Reference no: EM132003425

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