A Call Option on Juniper Corp

question 48

Multiple Choice

A call option on Juniper Corp.stock with an exercise price of $75 and an expiration date one year from now is worth $3.00 today.A put option on Juniper Corp.stock with an exercise price of $75 and an expiration date one year from now is worth $2.50 today.The risk-free rate of return is 8% and Juniper Corp.pays no dividends.The stock should be worth __________ today.

• A) $69.73
• B) $71.69
• C) $73.12
• D) $77.25

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Definitions:

Legal Aspects

The components and considerations related to law, including statutory, regulatory, and judicial principles governing a particular subject or activity.

Noncustodial Fathers

Fathers who do not have legal custody of their children and typically have specific visitation rights.

Stepfather

A man who is married to one's mother after the divorce of one's parents or the death of one's biological father, and who may act as a parent to one's self.

Upbringing

The treatment and education of a child by parents or guardians, including the social, cultural, moral, and behavioral training received during childhood.