The Six-Month At-The-Money European Call Option on a Stock Worth

question 11

Multiple Choice

The six-month at-the-money European call option on a stock worth $25 is priced at $5.The rate of interest is 2%.The put is priced at $7.The dividend paid at the end of three months must be

• A)1.23
• B)2.26
• C)3.83
• D)4.77

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Definitions:

Cochlear Implant

A surgically implanted electronic device that provides a sense of sound to a person who is profoundly deaf or severely hard of hearing.

Hearing Impairment

A partial or total inability to hear sound in one or both ears.

Electronic Device

A device that operates on electricity, typically using semiconductors and electronic circuits to perform its function.

Cones

Photoreceptor cells in the retina of the eye that are responsible for color vision and function best in relatively bright light.