A Stock Is Selling for $41

question 6

Multiple Choice

A stock is selling for $41.60.The strike price on a call,maturing in 6 months,is $45.The possible stock prices at the end of 6 months are $35.00 and $49.00.Interest rates are 5.0%.Given an under-priced option,what are the short sale proceeds in an arbitrage strategy?

• A) $6.36
• B) $8.22
• C) $10.43
• D) $11.89

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Definitions:

Menopause

A natural biological process in women that marks the end of their reproductive years, characterized by the cessation of menstruation.

Late Adulthood

A life stage characterized by the aging process, typically considered to start around the age of 65 years and onwards.

Evolutionary Perspective

A theoretical approach that explains useful mental and psychological traits—such as memory, perception, or language—as adaptations, i.e., as the functional products of natural selection.

Psychosocial

Pertaining to the interrelation of social factors and individual thought and behavior.