A Call Option with a $35 Strike Price on Bavarian

question 13

Multiple Choice

A call option with a $35 strike price on Bavarian Sausage stock will expire in one year.If you know that the risk free rate is 6%,that the stock currently sells at $38 and the put on the same stock has a value of $3.85,what is the price of the call?

• A) $3.85
• B) $6.26
• C) $7.34
• D) $8.83

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Definitions:

Social Psychology

The scientific study of how individuals think, feel, and behave in social contexts.

Attribution

The process by which individuals explain the causes of behavior and events, often attributed to internal or external factors.

Internal Attribution

The inference that an event or a person's behavior is due to personal factors such as traits, abilities, or feelings.

External Attribution

The process of inferring that a person's behavior is due to situational factors outside of their control, rather than internal characteristics.