A One Year Call Option Has a Strike Price of 60,expires

question 13

Multiple Choice

A one year call option has a strike price of 60,expires in 6 months,and has a price of $2.5.If the risk free rate is 7%,and the current stock price is $55,what should the corresponding put be worth?

• A) $5.00
• B) $4.56
• C) $5.50
• D) $7.08
• E) $7.54

---

Definitions:

Appraisers

Professionals who estimate the value of property, such as real estate or fine art, often used for tax, insurance, or sale purposes.

Earnings per Share

A company's profit divided by its number of outstanding shares of stock, indicating the portion of a company's profit allocated to each share.

Cost of Debt

The effective rate that a company pays on its total debt, serving as a measure of the risk and a way to gauge the company's ability to manage its debt effectively.

Shares Outstanding

The total number of shares of a company’s stock that are currently owned by all its shareholders.