The Current Price of a Stock Is $50,the Annual Risk-Free

question 8

Multiple Choice

The current price of a stock is $50,the annual risk-free rate is 6%,and a 1-year call option with a strike price of $55 sells for $7.20.What is the value of a put option,assuming the same strike price and expiration date as for the call option?

• A)$7.71
• B)$8.12
• C)$8.55
• D)$9.00

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Definitions:

Sensory Integration

The process by which the brain combines information taken in through the senses to make a whole, coherent picture of the environment.

Cerebellum

The part of the brain located at the back of the skull that is responsible for coordinating voluntary movements.

Reticular Formation

A complex network of nerve pathways in the central nervous system that plays a key role in controlling arousal and alertness.

Temporal Lobe

A region of the brain responsible for processing auditory information and is also involved in memory and emotion.