Exhibit 20 -Refer to Exhibit 20

question 11

Multiple Choice

Exhibit 20.6
Use the Information Below for the Following Problem(S)
The current stock price of ABC Corporation is $53.50. ABC Corporation has the following put and call option prices that expire 6 months from today. The risk-free rate of return is 5% and the expected return on the market is 11%.
$$\begin{array} { c c c } \text { Exprcisp Price } & \text { Put Price } & \text { Call Price } \\50 & \$ 1.50 & \$ 5.75 \\55 & \$ 3.25 & \ldots\end{array}$$
-Refer to Exhibit 20.6.How could an investor create arbitrage profits?

• A) Sell the stock short, write a put, buy a call and invest the proceeds at the risk-free rate.
• B) Buy the stock, write a put, buy a call and invest the proceeds at the risk-free rate.
• C) Sell the stock short, buy a put, write a call and invest the proceeds at the risk-free rate.
• D) Buy the stock, write a put, buy a call and borrow the strike price at the risk-free rate.
• E) Sell the stock short, write a put, buy a call and borrow the strike price at the risk-free rate.

---

Definitions:

Cardiac Conduction

The process by which electrical impulses are generated and transmitted throughout the heart muscle, leading to heart contraction and blood circulation.

Right Atrium

The right atrium is one of the four chambers of the heart, receiving deoxygenated blood from the body and pumping it into the right ventricle.

Blood Pressure

The pressure exerted by circulating blood upon the walls of blood vessels, often measured for health assessment.

Ventricles Contract

The phase of the cardiac cycle in which the ventricles of the heart contract, pumping blood to the body and lungs.