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

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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...

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