Suppose You Are Looking to Exploit Opportunities in the Options

question 32

Multiple Choice

Suppose you are looking to exploit opportunities in the options markets. The price of a call option on Apple computers with a maturity of one year and strike price $150 is $15, and the price of the stock is $140. What should the price of a put option be to preclude profitable opportunities? The risk-free rate of interest is 5%.

• A) $21.45
• B) $17.86
• C) $25.00
• D) $19.63

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Definitions:

Self-Presentation

The process of controlling the image and impressions one conveys to others in social contexts.

Symbolic Self-Completion

A psychological theory suggesting that individuals strive to achieve and display symbols of success and competence to themselves and others to compensate for what they perceive as a lack in their self-identity.

Anterior Cingulate Cortex

A part of the brain involved in emotion regulation, decision-making, and the processing of physical pain.

Prefrontal Cortex

The region of the brain that regulates impulsive behavior.