A Dividend Paying Stock Is Currently Selling for $32

question 17

Multiple Choice

A dividend paying stock is currently selling for $32. The price of a $30 strike call with a 6 month expiration is $3.10. If the interest rate is 3%, what is the price of the put option assuming the dividend is paid in 6 months and is $0.50?

• A) $0.66
• B) $1.15
• C) $1.36
• D) $1.56
• E) None of the options.

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Definitions:

Measurable

Able to be measured or represented using numbers.

Assess

To assess or determine the characteristics, capacity, or value of something.

Intangible Activities

Activities or services that offer value but do not result in the ownership of physical goods.

Organization

An entity comprising multiple people structured in a specific way to achieve a collection of goals or objectives.