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Question
You are considering purchasing a put option on a stock with a current price of $33. The exercise price is $35, and the price of the corresponding call option is $2.25. According to the put-call parity theorem, if the risk-free rate of interest is 4% and there are 90 days until expiration, the value of the put should be ____________.A. $2.25
B. $3.91
C. $4.05
D. $5.52
Answer
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Related questions
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Q:
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II. WEBS trade continuously on the AMEX.
III. WEBS are passively managed.
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B. II and III only
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Q:
The major participants who directly purchase securities in the capital markets of other countries are predominantly ____________.
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B. individual investors
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Q:
In the PRS financial risk ratings, the United States rates poorly because of the U.S. ________.
I. Large budget deficit
II. Large trade deficit
III. Large amount of total debt
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Q:
The yen-per-dollar spot rate is 104. The yen-per-dollar forward rate is 107. If the U.S. risk-free rate is 2.4%, what is the likely yen risk-free rate?
A. 1.24%
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Q:
The risk-free rate in the United States is 4%, and the risk-free rate in Japan is 1.2%. If the spot rate of yen to dollars is 105, what is the likely yen-per-dollar forward rate?
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Q:
Passive investors with well-diversified international portfolios _________.
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Q:
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B. foreign exchange risk
C. market risk
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Q:
EAFE stands for _______.
A. Equity and Foreign Exchange
B. Europe, Australasia, Far East
C. Europe, Asian, Foreign Exchange
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Q:
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A. sell S&P 500 Index futures
B. sell Treasury-bond futures
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Q:
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Q:
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Q:
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Q:
The option smirk in the Black-Scholes option model indicates that __________.
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Q:
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A. 10
B. 30
C. 60
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Q:
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Q:
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A.
a decrease in the exercise price
B.
a decrease in time to expiration of the put
C.
an increase in the volatility of the underlying stock
D.
Q:
Consider the Sharpe and Treynor performance measures. When a pension fund is large and well diversified in total and it has many managers, the __________
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Q:
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Q:
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Q:
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Q:
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B. sellers of futures contracts only
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Q:
Initial margin is usually set in the region of ________ of the total value of a futures contract.
A. 5%-15%
B. 10%-20%
C. 15%-25%
D. 20%-30%