You Are Considering Purchasing a Put Option on a Stock

question 26

Multiple Choice

You are considering purchasing a put option on a stock with a current price of $33. The exercise price is $35, and the price of the corresponding call option is $2.25. According to the put-call parity theorem, if the risk-free rate of interest is 4% and there are 90 days until expiration, the value of the put should be ________.

• A) $2.25
• B) $3.91
• C) $4.05
• D) $5.52

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Definitions:

Self-Actualization

The act of reaching or fulfilling one's own capabilities and talents, perceived as an inherent desire or requirement in everyone.

Unconscious Motives

Unconscious motives refer to hidden and automatic drivers of behavior that are not accessible to an individual's conscious awareness.

Typical Behavior

Typical behavior refers to actions or reactions that are considered normal or expected in a given context, based on societal standards or norms.

Cognitive-Social Learning

A theory that highlights the role of thought processes (cognition) in the social learning of behaviors, attitudes, and emotions.