A One-Year Call Option Has a Strike Price of 50

question 36

Multiple Choice

A one-year call option has a strike price of 50, expires in 6 months, and has a price of $5.04. If the risk-free rate is 5 percent, and the current stock price is $50, what should the corresponding put be worth?

• A) $3.04
• B) $4.64
• C) $6.08
• D) $3.83
• E) $0

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Definitions:

Prospecting

The process of identifying potential customers, clients, or buyers for a business's products or services.

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A plan of action designed to achieve a long-term or overall aim.

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A method of direct marketing in which a sales representative solicits prospective customers to buy products or services over the phone.

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Specific segments of the population identified as potential recipients for particular messages, products, or services based on common characteristics or needs.