Exhibit 20 -Refer to Exhibit 20

question 43

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 is the value of a synthetic stock created with put and call options that expire in 6 months with an expiration price of $50?

• A) $53.04
• B) $53.53
• C) $54.54
• D) $55.03
• E) $56.23

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Definitions:

Executive Control System

A cognitive system responsible for planning, decision making, problem-solving, and regulating emotions and behavior.

Dred Scott

An enslaved African American man who unsuccessfully sued for his freedom, resulting in a landmark U.S. Supreme Court decision in 1857.

Roger Taney

The fifth Chief Justice of the United States Supreme Court, known for his controversial ruling in the Dred Scott v. Sandford case, which denied citizenship to African Americans.

Missouri Compromise

An agreement passed in 1820 between the pro-slavery and anti-slavery factions in the United States Congress, involving the regulation of slavery in the western territories.