Exhibit 20 -Refer to Exhibit 20

question 71

Multiple Choice

Exhibit 20.7
Use the Information Below for the Following Problem(S)
The current stock price of Zanco Corporation is $50. Zanco Corporation has the following put and call option prices with exercise prices at $45 and $50.
$$\begin{array} { c c c } \text { Exprcisp Price } & \text { Put Price } & \text { Call Price } \\\$ 45 & \$ 1.50 & \$ 6.75 \\\$ 50 & \$ 3.75 & \$ 4.25\end{array}$$
-Refer to Exhibit 20.7.The time premium for the put option with a $45 exercise price is

• A) $0.00
• B) $1.50
• C) $2.75
• D) $5.25
• E) $6.50

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