A Stock Currently Trades for $115

question 87

Multiple Choice

A stock currently trades for $115. January call options with a strike price of $100 sell for $16, and January put options a strike price of $100 sell for $5. Estimate the price of a risk-free bond.

• A) $120
• B) $15
• C) $105
• D) $116
• E) $104

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Definitions:

Careful Decision Making

The process of making choices by considering various possible outcomes, implications, and carefully evaluating alternatives.

Controlled Processing

The mental activity that requires deliberate, conscious attention and effort, as opposed to automatic processes that require minimal awareness.

Social Loafing

The tendency of individuals to exert less effort on a task when working in a group compared to when working alone.

Contributions

Acts or offerings that aid in advancing a cause or improving a situation, often involving time, money, or effort towards a collective goal.