Exhibit 22.3 Use the Information Below for the Following Problem(S)

question 22

Multiple Choice

Exhibit 22.3
Use the Information Below for the Following Problem(S)
A stock currently trades for $130 per share. Options on the stock are available with a strike price of $125. The options expire in 10 days. The risk free rate is 3% over this time period, and the expected volatility is 0.35.
-Refer to Exhibit 22.3.Calculate the price of the put option.

• A) $1.086
• B) $0.862
• C) $6.234
• D) $0.623
• E) $2.317

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Definitions:

Inattentional Blindness

The failure to notice a fully visible but unexpected object because attention was engaged on another task, event, or object.

Dual Processing

Dual processing theory suggests that thought can arise in two different ways, or as a result of two different processes, often at the conscious and subconscious levels simultaneously.

Change Blindness

A perceptual phenomenon where a change in a visual stimulus goes unnoticed by the observer, indicating the limitations of human attention.

Text Messages

Written messages sent or received over a mobile phone network or the internet.