A Certain Stock Is Selling for $36

question 29

Multiple Choice

A certain stock is selling for $36.40. What is the minimum amount for which a call option on the stock with a strike price of $35 should sell?

• A)$1.40
• B)$0
• C)$35.00
• D)none of the above

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Definitions:

Tax Returns

A formal statement of income over a specific period, filed with the government or tax authority, used to calculate taxes owed or refunds due to the taxpayer.

Double Taxation

Refers to the taxation of the same income or financial transaction at two different levels, such as corporate profits taxed both at the corporate and individual shareholder level.

Dividends

Payments made by a corporation to its shareholders from its profits or reserves.

LLPs

Limited Liability Partnerships, a legal structure for businesses where partners have limited liabilities.