Calculate the PST on a Jacket Costing $89

question 213

Multiple Choice

Calculate the PST on a jacket costing $89.50 in British Columbia, Manitoba, and Saskatchewan. Use TABLE 1.2 as reference for the PST rates of the individual provinces.

• A) $6.27; $5.37; $7.16
• B) $5.37; $7.16; $4.48
• C) $5.37; $6.71; $7.16
• D) $7.16; $6.71; $5.37
• E) $6.27; $7.16; $4.48

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Definitions:

Risk-free Rate

Often considered as the return on government securities, it represents the interest an investor would expect from an absolutely risk-free investment over a specified period.

Put Option

A financial contract that gives the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified period.

Exercise Price

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

Put-call Parity

A principle stating the relationship between the prices of European put and call options with the same strike price and expiration date.