You Are Considering Purchasing a Put Option on a Share

question 20

Multiple Choice

You are considering purchasing a put option on a share with a current price of $33. The exercise price is $35 and the price of the corresponding call option is $2.25. According to the put-call parity theorem, if the risk-free rate of interest is 4% and there are 90 days until expiration, the value of the put should be ________.

• A)$2.25
• B)$3.91
• C)$4.05
• D)$5.52

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Definitions:

Drug Overdoses

The ingestion or application of a drug in quantities greater than are recommended or generally practiced, often leading to severe adverse effects.

Androgen

A type of hormone that plays a role in male traits and reproductive activity; testosterone is the most well-known androgen.

Estrogen

A group of hormones responsible for the development and regulation of female characteristics and reproductive processes.

Pituitary

A pea-sized gland located at the base of the brain, crucial for controlling various hormonal activities in the body.