Which Financing Method for Transporting Prisoners from Point a to B

question 104

Multiple Choice

Which financing method for transporting prisoners from point A to B will result in the greatest number of prisoners surviving the trip? Assume there are 50 prisoners being transported.

• A) The ship's captain is paid $100 by the government for every live prisoner that is loaded on board at Point A.
• B) The ship's captain is paid $100 by the government for every live prisoner that is unloaded at Point B.
• C) The ship's captain is paid $400 by the government for every live prisoner that is loaded on board at Point A.
• D) The ship's captain is paid a flat rate of $3,000 for the trip, rather than being paid per prisoner.

---

Definitions:

Exercise Price

The specified price at which the holder of an option can buy (in the case of a call option) or sell (in the case of a put option) the underlying asset.

Risk-Free Rate

The return on investment of a risk-free asset, typically considered as government bonds, where the investor is assumed to have zero default risk.

Quoted Price

A quoted price is the most recent price at which an asset or service was traded or offered for trade, reflecting the current market value as quoted on an exchange or in other financial contexts.

Call Option

A call option is a financial contract that gives the holder the right, but not the obligation, to buy a stock, bond, commodity, or other assets at a specified price within a fixed time period.