AK Scott's Stock Is Selling for $38 a Share

question 36

Multiple Choice

A.K. Scott's stock is selling for $38 a share. A 3-month call on this stock with a strike price of $35 is priced at $3.40. Risk-free assets are currently returning 0.18 percent per month. What is the price of a 3-month put on this stock with a strike price of $35?

• A) $0.21
• B) $0.49
• C) $4.99
• D) $5.85
• E) $6.20

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Definitions:

Classical Conditioning

A conditioning approach where pairing two stimuli repeatedly results in a response that, though initially evoked by the second stimulus, is later elicited solely by the first stimulus.

Reinforcement

A concept in psychology referring to any process that increases the likelihood of a behavior being repeated, using rewards or punishments following that behavior.

Social Learning

The process of acquiring skills, knowledge, and behaviors by observing and imitating others.

Bribery

The offering, giving, receiving, or soliciting of any item of value as a means of influencing the actions of an individual holding a public or legal duty.