The Following Prices Are Available for Call and Put Options

question 36

Short Answer

The following prices are available for call and put options on a stock priced at $50.The risk-free rate is 6 percent and the volatility is 0.35.The March options have 90 days remaining and the June options have 180 days remaining.The Black-Scholes model was used to obtain the prices.
Use this information to answer questions 1 through 20.Assume that each transaction consists of one contract (for 100 shares)unless otherwise indicated.
For questions 1 through 6,consider a bull money spread using the March 45/50 calls.
-What is the breakeven point?
A)$48.02
A)none of the above
B)$41.98
C)$55.66
D)$50.00

• A)$48.02
• A)none of the above
• B)$41.98
• C)$55.66
• D)$50.00

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Definitions:

Positive Psychology

A branch of psychology focused on the study and enhancement of positive human functions, such as happiness and well-being.

Approval of Others

The act of seeking validation, acceptance, or endorsement from people around us.

Undue Dependence

An excessive reliance on someone or something, which can limit autonomy and hinder personal growth or decision-making ability.

Psychoanalytic

A theory of personality and a method of psychotherapy, originally formulated by Sigmund Freud, that emphasizes unconscious motives and conflicts.