Exhibit 13-6
USE THE FOLLOWING INFORMATION TO ANSWER THE NEXT

question 54

Multiple Choice

Exhibit 13-6
USE THE FOLLOWING INFORMATION TO ANSWER THE NEXT QUESTION(S)
The current stock price of ABC Corporation is $53.50. ABC Corporation has the following put and call option prices that expire 6 months from today. The risk-free rate of return is 5% and the expected return on the market is 11%. $\begin{array}{ccc}\text { Exercise Price } & \text { Put Price } & \text { Call Price } \\\hline50 & \$ 1.50 & \$ 5.75 \\55 & \$ 3.25 & \ldots\end{array}$
-Refer to Exhibit 13-6. How could an investor create arbitrage profits?

• A) Sell the stock short, write a put, buy a call and invest the proceeds at the risk-free rate.
• B) Buy the stock, write a put, buy a call and invest the proceeds at the risk-free rate.
• C) Sell the stock short, buy a put, write a call and invest the proceeds at the risk-free rate.
• D) Buy the stock, write a put, buy a call and borrow the strike price at the risk-free rate.
• E) Sell the stock short, write a put, buy a call and borrow the strike price at the risk-free rate.

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Definitions:

Vocational Rehabilitation

A process that enables individuals with disabilities or injuries to overcome barriers to accessing, maintaining, or returning to employment or other useful occupation.

Competitive Employment

Employment in a workplace where individuals compete for positions, pay, and advancement based on skills and abilities, without special accommodations for disabilities.

Federal Funding

Government-provided financial resources allocated to specific projects, agencies, or organizations.

Sexual Assault

Any non-consensual sexual act or attempt to obtain a sexual act by violence, threats, or coercion.