The Current Price of a Stock Is $50, the Annual

question 19

Multiple Choice

The current price of a stock is $50, the annual risk-free rate is 6%, and a 1-year call option with a strike price of $55 sells for $7.20.What is the value of a put option, assuming the same strike price and expiration date as for the call option?

• A) $7.33
• B) $7.71
• C) $8.12
• D) $8.55
• E) $9.00

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Definitions:

Overhead Cost Performance Report

A document that compares the actual overhead costs incurred to the budgeted or standard overhead costs, for the purpose of monitoring and controlling these costs.

Efficiency Variances

Variances that occur when the actual performance deviates from the expected standards, often analyzed in terms of time, cost, and materials.

Budget Variance

The difference between budgeted figures for revenue and expenditure, and the actual amounts realized.

Budgeted Fixed Overhead

The estimated constant costs for a period that do not vary with the level of production or sales, such as rent, salaries, and insurance.