Exhibit 20 $\$ 3.25$ Premium
-Refer to Exhibit 20

question 106

Multiple Choice

Exhibit 20.4
Use the Information Below for the Following Problem(S)
Rick Thompson is considering the following alternatives for investing in Davis Industries which is now selling for $44 per share:
(1) Buy 500 shares, and
(2) Buy six month call options with mexercise price of 45 for $\$ 3.25$ premium
-Refer to Exhibit 20.4.Assuming no commissions or taxes what is the annualized percentage gain if the stock reaches $50 in four months and a call was purchased?

• A) 161.54% gain
• B) 53.85% gain
• C) 161.54% loss
• D) 11.11% gain
• E) 53.85% loss

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Definitions:

Panic Attack

A sudden onset of intense fear or discomfort, which may include symptoms like rapid heartbeat, sweating, trembling, or feelings of impending doom.

Public Place

An area that is open and accessible to people, such as parks, streets, and public squares, where individuals can gather and interact.

Inventories

Detailed lists of items, goods, or assets held by a person or business, often used for tracking and management purposes.

Standardized

Consistency and uniformity in the application of procedures, measures, or conditions for scientific studies or assessments.