connes only 5. A put option with exercise price $66 and 4 months to expiration sells for $10. The continuously-compounded risk-free rate is 6% annually, and the stock sells for $61. How much must a call option sell for with the same exercise price and expiration? $6.31 B) $5.00 c) $0.00 D) $-1.26 $10.00 A) 6. Assume that the delta of a call option on a firm's assets is 0.71. This means that a $60,000 project will increase the value of equity by: A) $34.932. B) $42,600. $46,008. $66,456. $93,720. 7. If you consider the equity of a firm to be an option on the firm's assets then the act of pay off debt is comparable to on the assets of the firm. A) purchasing a put option B) purchasing a call option exercising an in-the-money put option exercising an in-the-money call option selling a call option D) E) 8. You own shares of a stock and believe the stock price will increase in the future. H realize the stock price could decline and want to hedge that risk. Which one of the fo option positions should you take to create the desired hedge? A. buy a call B. sell a call C. buy a put D. sell a put E. none of the above 9. Prestonice of $41. At the pres rate is .9 percent... price per unit and 9. Preston Milled Products currently sells a product with a variable cost per un selling price of $41. At the present time, the firm only sells on a cash basis wi 230 units. The monthly interest rate is 9 percent. What is the switch break-ev switched to a net 30 credit policy? Assume the selling price per unit and the unit remain constant. A) 240 units