An American-Style Call Option with Six Months to Maturity Has

question 35

Multiple Choice

An American-style call option with six months to maturity has a strike price of $35.The underlying stock now sells for $43.The call premium is $12.If the risk-free rate is 6%,what should be the value of a put option on the same stock with the same strike price and expiration date?

• A) $3.00
• B) $2.02
• C) $12.00
• D) $5.25
• E) $8.00

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Definitions:

Pollen

Fine to coarse powder containing the microgametophytes of seed plants, which produce male gametes (sperm cells) for fertilization.

Megasporocyte

Cell within a megasporangium that undergoes meiosis to produce four n megaspores; also called megaspore mother cell. Compare with microsporocyte.

Meiosis

A form of cellular division that halves the number of chromosomes, leading to the creation of either gametes or spores.

Gametophyte

The sexual phase in the life cycle of plants and algae that produces gametes, typically through mitosis.