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:

Fast Mapping

A process of quickly determining a word’s meaning, which facilitates children’s vocabulary development.

Word Learning

the process by which individuals, especially infants and children, acquire the ability to understand, speak, and use words as part of language development.

Concrete Memory Aids

Physical objects or tools used to assist in the recollection of memories or information, such as flashcards or mnemonic devices.

Labeling Strategies

Techniques or methods used in identifying and classifying items or individuals into categories based on specific criteria.