Exhibit 20 -Refer to Exhibit 20

question 34

Multiple Choice

Exhibit 20.6
Use the Information Below for the Following Problem(S)
The current stock price of ABC Corporation is $53.50. ABC Corporation has the following put and call option prices that expire 6 months from today. The risk-free rate of return is 5% and the expected return on the market is 11%.
$$\begin{array} { c c c } \text { Exprcisp Price } & \text { Put Price } & \text { Call Price } \\50 & \$ 1.50 & \$ 5.75 \\55 & \$ 3.25 & \ldots\end{array}$$
-Refer to Exhibit 20.6.What should the price be of a call option that expires 6 month from today with an exercise price of $55?

• A) $1.33
• B) $3.08
• C) $4.58
• D) $6.07
• E) $6.33

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Definitions:

Black Shirts

The paramilitary wing of the National Fascist Party in Italy, known for their black uniforms and loyalty to Benito Mussolini, prominently active before and during World War II.

Militant Organization

A militant organization is a group that uses confrontational or violent methods to achieve political, religious, or ideological goals.

National Industrial Recovery Act

A legislation passed in 1933 as part of President Franklin D. Roosevelt's New Deal, aimed at stimulating economic recovery during the Great Depression by regulating industry standards and workers' rights.

Economic Recovery

The process of recovery in an economy that leads to increased business activity, employment, and production after a period of recession or downturn.