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:

Regulator Gene

A gene involved in controlling the expression of one or more other genes, often by producing a protein that can enhance or suppress gene activity.

Transcription

The process of converting DNA into RNA, specifically messenger RNA (mRNA), which then directs protein synthesis.

Repressor Molecule

A protein that inhibits gene expression by binding to the operator or associated silencers.

Operator

In genetics, a segment of DNA to which a repressor protein binds, controlling the transcription of nearby genes.