Top Flight Stock Currently Sells for $53

question 75

Multiple Choice

Top Flight Stock currently sells for $53.A one-year call option with strike price of $58 sells for $10, and the risk-free interest rate is 5.5%.What is the price of a one-year put with strike price of $58

• A)$10.00
• B)$12.12
• C)$16.00
• D)$11.97
• E)$14.13

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Definitions:

Income from Operations

Net earnings generated from a company's normal business operations, excluding revenues and expenses from non-operational activities.

Periodic Inventory System

An inventory system where updates to inventory levels are made on a periodic basis rather than continuously.

Cost of Goods Sold

Cost of Goods Sold (COGS) refers to the direct costs attributable to the production of the goods sold by a company, including materials and labor.

Purchases

The total amount of goods and materials acquired by a business for the purpose of resale or production during a specific accounting period.