A Call Option Has a Premium of $0

question 28

Multiple Choice

A call option has a premium of $0.60,a strike price of $40,and 3 months to expiration.The current stock price is $39.60.The stock will pay a $0.80 dividend two months from now.The risk-free rate is 3 percent.What is the premium on a 3-month put with a strike price of $40? Assume the options are European style.

• A) $0.25
• B) $0.51
• C) $0.78
• D) $1.23
• E) $1.50

---

Definitions:

Community-Based Mental Health

Refers to mental health services and support that are delivered in community settings rather than in hospitals or clinics, aiming to provide accessible, localized care.

Public State Hospital

A Public State Hospital is a healthcare facility funded and operated by the government, often providing medical care to the public at low or no cost, especially to those unable to afford private healthcare.

Antipsychotic Drugs

Medications used to manage psychosis, including delusions, hallucinations, and disorders such as schizophrenia.

Treatment Approaches

Various strategies or methods used in the management and care of patients to alleviate symptoms or address the root cause of health conditions.