85 answer b 5

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Unformatted text preview: 5.00. Interest rates are 6.0%. How much money would you borrow to create an arbitrage on a call trading for $2.00? A) 2.54 $ B) 4.85 $ C) 6.60 $ D) 8.85 $ Answer: B 5) stock is selling for $41.60. The strike price on a call, maturing in 6 months, is $45. The A possible stock prices at the end of 6 months are $35.00 and $49.00. Interest rates are 5.0%. Given an under-priced option, what are the short sale proceeds in an arbitrage strategy? A) 6.36 $ B) 8.22 $ C) 10.43 $ D) 11.89 $ Answer: D 1 6) stock is selling for $53.20. Interest rates are 6.0% and the returns on the stock have a A standard deviation of 24.0%. What is the forecasted up movement in the stock over a 6month interval? A) 64.96 $ B) 69.69 $ C) 73.48 $ D) 76.96 $ Answer: A 7) stock is selling for $53.20. Interest rates are 6.0% and the returns on the stock have a A standard deviation of 24.0%. What is the forecasted up movement in the stock over 6 months, assuming two periods of 3 months each? A) 64.96 $ B) 69.69 $ C) 73.48 $ D) 76.96 $ Answer: B 8) stock is selling for $68.50. Interest rates are 6.0% and the retur...
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This document was uploaded on 10/30/2013.

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