Answer:
The correct answer is $18.206.
Explanation:
The yield percentage is given as 4.8%.
The stock price is given as $85.
The exercise price of the call option is given as $70.
Value of the call option will be
= Stock price- present value of the exercise price
= [tex]85-\frac{70}{1+0.048}[/tex]
= $85 - $66.79
= $18.206
So, the value of call option is $18.206.
