# Ch 9 quiz - Question 1(1 point The current price of a stock...

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Question 1 (1 point) The current price of a stock is \$50, the annual risk-free rate is 6%, and a 1-year call option with a strike price of \$55 sells for \$7.20. What is the value of a put option, assuming the same strike price and expiration date as for the call option? Student response: Student Response Answer Choices a. \$7.33 b. \$7.71 c. \$8.12 d. \$8.55 e. \$9.00 Score:1 / 1 Question 2 (1 point) Warner Motors' stock is trading at \$20 a share. Call options that expire in three months with a strike price of \$20 sell for \$1.50. Which of the following will occur if the stock price increases 10%, to \$22 a share? Student response: Student Respons e Answer Choices a. The price of the call option will increase by \$2. b . The price of the call option will increase by more than \$2. c. The price of the call option will increase by less than \$2, and the percentage increase in price will be less than 10%. d . The price of the call option will increase by less than \$2, but the percentage increase in price will be more than 10%. e. The price of the call option will increase by more than \$2, but the percentage increase in price will be less than 10%.

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Score:1 / 1 Question 3 (1 point) Deeble Construction Co.'s stock is trading at \$30 a share. Call options on the company's stock are also available, some with a strike price of \$25 and some with a strike price of \$35. Both options expire in three months. Which of the following best describes the value of these options? Student response:
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Ch 9 quiz - Question 1(1 point The current price of a stock...

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