Exhibit 22.7 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 48

Multiple Choice

Exhibit 22.7
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
GE Corporation has a put option selling for $2.90 and a call option selling for $1.95, both with a strike price of $29.00.
-Refer to Exhibit 22.7. What would the net value of a long straddle position be if the stock price at expiration is $35?

• A)-7.15
• B)-$1.15
• C)$1.15
• D)$7.15
• E)$36.15

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Definitions:

Appropriate Feedback

Constructive and relevant information given to an individual or group regarding their behavior or performance intended to guide future improvements.

Equity Theory

A theory in social psychology and organizational behavior that explains how individuals perceive fairness in distribution of resources within interpersonal relationships, leading to feelings of satisfaction or dissatisfaction.

Input to Outcome

The relationship or correlation between contributed resources or efforts (inputs) and the results or achievements (outcomes).

Fairness of Rewards

The perceived equity and justice of the distribution of outcomes and rewards among individuals or groups, influencing their satisfaction and motivation.