ABX Corporation Stock Is Currently Trading for $37

question 42

Multiple Choice

ABX corporation stock is currently trading for $37.60.A one-year European call option on ABX is currently trading for $7.23,and a one-year European put option on ABX with the same strike price is currently trading for $0.76.If the stock pays no dividends,and the risk-free rate is 3% per year,what is the strike price of the options?

• A)$30.50
• B)$46.96
• C)$45.39
• D)$31.13
• E)$32.06

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Definitions:

Opportunity Cost

The financial impact of bypassing the second most advantageous alternative in decision-making.

Sweden

A country in Northern Europe known for its high standard of living, advanced welfare state, and commitment to social equality.

Cars

Cars are motor vehicles with four wheels designed to transport people on roads.

Opportunity Cost

The economic consequence of overlooking the subsequent best option when decisions are made.