1. Which of the following is an example of a growth option?
a) Expansion of an existing product line
b) Temporary suspension of operations
c) Wait to start a project until more information is available
d) Contraction of operations
e) Alteration of operations depending on conditions
2. Nowel Inc. stock is currently priced at $42. The present value of the strike price of a call option on this stock is $44. Probability one, as calculated by the Black Scholes option pricing model is .6541; probability 2 is .3722. The value of this option as calculated by Black-Scholes is
A) $(2.00).
B) $11.10.
C) $2.000.
D) $10.71.