A Futures Price Is Currently 40 Cents

question 2

Multiple Choice

A futures price is currently 40 cents.It is expected to move up to 44 cents or down to 34 cents in the next six months.The risk-free interest rate is 6%.What is the value of a six-month put option with a strike price of 37 cents?

• A) 3.00 cents
• B) 2.91 cents
• C) 1.16 cents
• D) 1.20 cents

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Definitions:

Primary Labor Market

Refers to sectors that offer stable, well-paid jobs, often with good working conditions and opportunities for advancement.

Social Barriers

Obstacles that exist within societies, which prevent individuals or groups from accessing resources, opportunities, or rights, contributing to inequality.

Conglomerates

Large corporations that operate in several industries at the same time.

Laissez-Faire Economy

An economic system in which transactions between private parties are free from government intervention such as regulation, privileges, tariffs, and subsidies.