A Call Option Sells for $1

question 103

Multiple Choice

A call option sells for $1.50, and a put option sells for $2.80. Both options are European style having a strike price of $25 and three months to expiration. If the risk-free rate is 4 percent, what is the price of the stock?

• A) $23.46
• B) $92.02
• C) $101.79
• D) $96.91
• E) $99.68

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Definitions:

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involves the process of growth, change, and progression in physical, emotional, intellectual, and social capabilities and understanding throughout the lifespan.

Archetype

In psychology, universally inherent, primordial patterns and images that form part of the collective unconscious.

Ego

In psychoanalytic theory, the part of the personality that mediates between desires, the conscience, and reality to make rational decisions.

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The period in a human's life that spans from birth to adolescence, characterized by growth, learning, and play.