A One Year Call Option Has a Strike Price of 50,expires

question 60

Multiple Choice

A one year call option has a strike price of 50,expires in 6 months,and has a price of $4.74.If the risk free rate is 3%,and the current stock price is $45,what should the corresponding put be worth?

• A) $12.74
• B) $10.48
• C) $5.00
• D) $9.00
• E) $8.30

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Definitions:

Glucocorticoid

A type of steroid hormone produced by the adrenal glands that regulates metabolism and immune response.

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General Adaptation Syndrome

A three-stage process (alarm, resistance, exhaustion) that describes the physiological changes the body goes through under stress.

Exhaustion

A state of extreme physical or mental fatigue, often resulting from overwork or stress.