Alicia Owns 500 Shares of Danube Stock

question 25

Multiple Choice

Alicia owns 500 shares of Danube stock. She thinks the market price will continue to rise but would like to ensure that she can get at least $47.50 a share should she decide to sell her shares. The 47.50 call option is quoted at $1.05 bid, $1.15 ask. The 47.50 put is quoted at $.80 bid, $.85 ask. How much will it cost her to ensure that she can sell all her shares for at least $47.50 each?

• A)$805
• B)$740
• C)$670
• D)$530
• E)$425

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