The Following Prices Are Available for Call and Put Options

question 2

Multiple Choice

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.
Answer questions 18 through 20 about a long box spread using the June 50 and 55 options.
-What is the net present value of the box spread?

• A)$9.84
• B)$5.00
• C)$16.00
• D)$1.84
• E)none of the above

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Definitions:

Parkinson Disease

A progressive neurological disorder marked by tremor, muscle rigidity, and slow, imprecise movement, chiefly affecting middle-aged and elderly people.

Positive Symptoms

In the context of certain psychological disorders, symptoms that reflect an excess or distortion in normal functions, such as hallucinations or delusions.

Negative Symptoms

Negative symptoms refer to the absence or diminution of normal behaviors or feelings, commonly observed in certain psychiatric disorders such as schizophrenia.

Disordered Brain

Refers to a state or condition where the brain's normal functions are disrupted, leading to psychological or neurological issues.