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

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Definitions:

Determination

The process of deciding or concluding something based on data, evidence, or logical reasoning.

Independent Variables

Factors in an experiment that are manipulated or changed to observe their effects on dependent variables.

SST

Total Sum of Squares, a measure of the total variance in a dataset, used in the context of regression analysis to assess the variability of data points.

SSR

Sum of Squares due to Regression, representing the variation explained by the regression model.