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FAB Plc Will Need $200,000 in 90 Days to Cover

question 41

Multiple Choice

FAB plc will need $200,000 in 90 days to cover a payable position. Currently, a 90-day call option with an exercise price of £0.57 and a premium of £0.01 is available. Also, a 90-day put option with an exercise price of £0.55 and a premium of £0.01 is available. FAB plans to purchase options to hedge its payable position. Assuming that the spot rate in 90 days is £0.52, what is the net amount paid, assuming FAB wishes to minimize its cost?

Recognize the differences and purposes of the Securities Act of 1933 and the Securities Exchange Act of 1934.

Identify the exemptions from registration requirements and their conditions.

Comprehend the requirements and implications of SEC reporting and disclosure obligations.

Understand the implications of the Sarbanes-Oxley, Dodd-Frank, and other significant amendments on securities law.

Definitions:

Deindividuation

A psychological state where an individual loses self-awareness and personal responsibility in groups, often leading to disinhibited and impulsive behavior.

Mood Linkage

The phenomenon where individuals' emotional states become synchronized or influenced by the moods and emotions of those around them.

Prior Commitment

The psychological state or condition of being previously dedicated or bound to a particular belief, action, or course of behavior.

Group's Status

The relative standing or prestige of a group within a social or organizational context.