One-Year European Call and Put Options on an Asset Are

question 6

Multiple Choice

One-year European call and put options on an asset are worth $3 and $4 respectively when the strike price is $20 and the one-year risk-free rate is 5%.What is the one-year futures price of the asset if there are no arbitrage opportunities? (Use put-call parity.)

• A) $19.55
• B) $18.95
• C) $20.95
• D) $20.45

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Definitions:

Mental Hospitals

Institutions specialized in providing treatment and care for individuals with mental illnesses.

Psychotherapy

A form of treatment for mental health conditions where a trained therapist uses psychological methods to help a person change and overcome problems in desired ways.

Psychoanalysis

A therapeutic approach that focuses on exploring unconscious desires and conflicts to understand and treat psychological disorders.

Applied Behavior Analysis

A therapy based on the science of learning and behavior, aiming at improving specific behaviors and understanding how behaviors are affected by the environment.