The current price of the underlying asset of a European call is $14. The strike of this call is $11 and it expires in one year. The annual compounding interest rate is r = 3% and the yearly volatility is o = 12%. What is the current value of the call?

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Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.