The Price of a Stock,which Pays No Dividends,is $30 and the Strike

question 11

Multiple Choice

The price of a stock,which pays no dividends,is $30 and the strike price of a one year European call option on the stock is $25.The risk-free rate is 4% (continuously compounded) .Which of the following is a lower bound for the option such that there are arbitrage opportunities if the price is below the lower bound and no arbitrage opportunities if it is above the lower bound?

• A) $5.00
• B) $5.98
• C) $4.98
• D) $3.98

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Definitions:

Employment Equity Program

A policy aimed at countering discrimination in the workplace by encouraging the equal hiring and treatment of underrepresented groups.

Systemic Discrimination

The exclusion of members of certain groups through the application of employment policies or practices based on criteria that are not job related.

Employment Equity Implementation

The process of applying policies and practices to correct inequalities in employment and representation within a workplace, particularly for historically disadvantaged groups.

Discrimination Gap Analysis

An evaluation method aimed at identifying disparities in the treatment or outcomes of different groups of employees, potentially indicating the presence of discrimination.