Exhibit 22.7 Use the Information Below for the Following Problem(S)

question 9

Multiple Choice

Exhibit 22.7
Use the Information Below for the Following Problem(S)
GE Corporation has a put option selling for $2.90 and a call option selling for $1.95, both with a strike price of $29.00.
-Refer to Exhibit 22.7.What would the net value of a covered call position be if the stock price at expiration is $35?

• A) $29.00
• B) $30.65
• C) $33.55
• D) $36.00
• E) $36.65

---

Definitions:

Independent Variables

Variables in an experiment or model that are manipulated or changed to assess their effect on dependent variables.

Degrees Of Freedom

A parameter of the t distribution. When the t distribution is used in the computation of an interval estimate of a population mean, the appropriate t distribution has n − 1 degrees of freedom, where n is the size of the sample.

Observations

Individual data points or recorded measures from a study or experiment.

Independent Variables

Factors in a model or experiment that are deliberately altered to study their impacts on outcome variables.