A Stock Priced at $65 Has a Standard Deviation of 30

question 5

Multiple Choice

A stock priced at $65 has a standard deviation of 30%. Three-month calls and puts with an exercise price of $60 are available. The calls have a premium of $7.27, and the puts cost $1.10. The risk-free rate is 5%. Since the theoretical value of the put is $1.525, you believe the puts are undervalued.
If you want to construct a riskless arbitrage to exploit the mispriced puts, you should ________.

• A) buy the call and sell the put
• B) write the call and buy the put
• C) write the call and buy the put and buy the stock and borrow the present value of the exercise price
• D) buy the call and buy the put and short the stock and lend the present value of the exercise price

Recognize the scope and limitations of content analysis, including applicable mediums.

Comprehend the importance and methods of data reduction and description in research.

Identify the significance of a defensible content analysis coding scheme.

Understand the terminology and shorthand used in content analysis.

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Definitions:

Thesis Statement

A concise statement or proposition that presents the main idea or argument of an essay, research paper, or dissertation, usually stated in one sentence.

New York City

A metropolis in the United States known for its significant cultural, financial, and media impacts globally.

South Carolina

A state in the southeastern United States known for its subtropical beaches, marshlike sea islands, and historical significance in American history.

Thesis Statement

A concise summary of the main point or claim of an essay, research paper, etc., usually one sentence that appears in the introduction.