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:

Fritsch and Hitzig

Pioneers in neurophysiology, known for their research demonstrating that electrical stimulation of certain parts of the dog's brain resulted in muscular contractions on the opposite side of the body.

Auditory Stimulation

The process of inducing a response through exposure to sound, affecting perception, emotions, or cognitive functions.

Temporal Lobes

Regions of the cerebral cortex located beneath the temples, involved in processing sensory input and assigning it emotional meaning.

Occipital

Pertaining to the occipital lobe of the brain, which is primarily involved in visual processing.