Today, You Are Buying a One-Year Call on SLO Stock

question 154

Multiple Choice

Today, you are buying a one-year call on SLO stock with a strike price of $50 along with a one-year risk-free asset that pays 4 percent interest. The cost of the call is $3.20 and the amount invested in the risk-free asset is $48.08. What is the most you can lose over the next year?

• A) -$3.33
• B) -$3.20
• C) -$3.08
• D) -$1.28
• E) -$0.72

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A scholar who studies and develops theories on how individuals acquire knowledge, skills, and behaviors.

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