The Spot Price of the Market Index Is $900

question 12

Multiple Choice

The spot price of the market index is $900.After 3 months the market index is priced at $920.The annual rate of interest on treasuries is 2.4% (0.2% per month) .The premium on the long put,with an exercise price of $930,is $8.00.At what index price does a long put investor have the same payoff as a short index investor? Assume the short position has a breakeven price of $930.

• A) $921.90
• B) $930.00
• C) $938.05
• D) $940.00

Comprehend the compatibility and accessibility options for electronic document formats.

Learn basic document editing and formatting conventions, including text insertion direction, working with images, and utilizing the Standard toolbar for printing.

Understand the concept and significance of dividends and how they relate to shareholder value.

Calculate dividend yield and understand its importance in investment decisions.

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Definitions:

Politicians

Individuals engaged in directing or influencing government policy and decision-making.

Short-Run Benefits

Advantages or gains received in the immediate future, often without consideration for long-term implications.

Economic Thinking

The process of making decisions based on the efficient allocation of scarce resources.

Personal Benefits

Are advantages or favorable outcomes that accrue directly to an individual as a result of their actions or decisions.