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:

Receptor Cells

Specialized cells that respond to specific types of energy (e.g., light, sound) and convert it into neural activity.

Taste Buds

Sensory organs located on the tongue and are responsible for the perception of taste.

Psychophysical Study

The branch of psychology that deals with the relationships between physical stimuli and their subjective perception or psychological effects.

Absolute Threshold

The minimum stimulus intensity that an organism can detect at least 50% of the time, a concept used in sensory psychology.