Exhibit 22 -Refer to Exhibit 22

question 8

Multiple Choice

Exhibit 22.2
Use the Information Below for the Following Problem(S)
$$\begin{array} { c} &&\text{XYZ CORP}\\ & \quad\quad\quad\quad \text { Exercise } & & \quad\quad\quad\quad\quad\quad { \text { NYSE } } \\& \text { Date } & \text { Price } & \text { Price } & \text { Clase } \\\hline \text { Calls } & \text { OCT } & 85 & 163 / 4 & 101\quad11 / 16 \\& \text { OCT } & 90 & 12 & 101\quad11 / 16 \\& \text { OCT } & 95 & 75 / 8 & 101\quad11 / 16 \\\text { Puts } & \text { OCT } & 85 & 1 / 8 & 101\quad11 / 16 \\& \text { OCT } & 90 & 3 / 8 & 101\quad11 / 16 \\& \text { OCT } & 95 & 13 / 16 & 101\quad11 / 16\end{array}$$
-Refer to Exhibit 22.2.If you establish a long strap using the options with an 85 exercise price,what is your dollar gain or loss if at expiration XYZ is still trading at 101 11/16?

• A) $1,687.50 loss
• B) $3,362.50 loss
• C) $3,675.50 gain
• D) $13.00 gain
• E) $13.00 loss

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Definitions:

Residual Value

The estimated value of a fixed asset at the end of its useful life.

Average Rate

A mean value calculated to represent the typical rate of something, such as interest, return, or speed, over a given period.

Fixed Asset

Long-term tangible property that a firm owns and uses in its operations to generate income, such as buildings and machinery.

Useful Life

The estimated period over which an asset is expected to be usable by an organization, after which it is considered to be no longer useful for business operations.