A One Year Call Option Has a Strike Price of 50,expires

question 60

Multiple Choice

A one year call option has a strike price of 50,expires in 6 months,and has a price of $4.74.If the risk free rate is 3%,and the current stock price is $45,what should the corresponding put be worth?

• A) $12.74
• B) $10.48
• C) $5.00
• D) $9.00
• E) $8.30

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Definitions:

Discretionary Fixed Cost

Fixed costs that are not directly related to production and can be changed or eliminated at management's discretion.

Insurance

A financial product providing protection against potential future losses or damages.

Management Development Programs

Structured training and educational initiatives designed to enhance the leadership skills of managers.

Cost Formula

An equation or method used to determine the total cost of production or service provision, typically including fixed and variable components.