Exhibit 22.3 Use the Information Below for the Following Problem(S)

question 53

Multiple Choice

Exhibit 22.3
Use the Information Below for the Following Problem(S)
A stock currently trades for $130 per share. Options on the stock are available with a strike price of $125. The options expire in 10 days. The risk free rate is 3% over this time period, and the expected volatility is 0.35.
-Assume that you have just sold a stock for a loss at a price of $75,for tax purposes.You still wish to maintain exposure to the sold stock.Suppose that you sell a put with a strike price of $80 and a price of $7.25.Calculate the effective price paid to repurchase the stock if the price after 35 days is $85.

• A) $77.75
• B) $87.25
• C) $82.25
• D) $72.75
• E) None of the above.

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Definitions:

Employee Assistance Program

Workplace-initiated programs that provide confidential resources and support to employees dealing with personal or work-related issues.

Air Traffic Controller

A professional responsible for directing aircraft safely in the sky and on the ground at airports, ensuring the orderly and efficient flow of air traffic.

Managed Care Programs

Healthcare systems designed to optimize patient care, utilization of services, and minimize costs through predetermined networks and coverage limits.

Mental Disorders

A wide range of conditions affecting mood, thinking, and behavior, impacting an individual's ability to function.