A Stock Is Selling for $60 Per Share

question 18

Multiple Choice

A stock is selling for $60 per share.A call option with an exercise price of $65 sells for $3.31 and expires in 4 months.The risk-free rate of interest is 2.8 percent per year,compounded continuously.What is the price of a put option with the same exercise price and expiration date?

• A)$5.99
• B)$6.23
• C)$6.47
• D)$7.21
• E)$8.94

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Definitions:

Annual Income

Annual income refers to the total earnings received by an individual, household, or entity within a year from all sources, including wages, investments, and other forms of compensation.

Income Distribution

How income is spread across different sections of the population, often used to analyze economic inequality.

Taste-For-Discrimination

A concept in economics referring to preferences or biases that lead to discriminatory behavior or practices in the labor market or product choice.

African-American Workers

Individuals of African descent who are part of the labor force in various sectors of the economy.