Cost of capital is simply jo ap paise (capital) use karte ho business karne liye..wo arrange karne me apko kuch cost dena padta hai like agar wo apka khud ka paisa hai to uspe anne wala return wo hogai uski cost ya fir loan agar liya hai to uspe jo ap interest doge wo hogai cost..ya manlo mix hai dono ka to fir weights ke proportion leke us hisab se cost kya hogi..

So issi ko cost of capital bolte hai.. imagine ap ek business kar rahe ho..jisme 100 rs lage ge.. ab 40 apne khud ke lagae aur 60 ka debt le liya..debt pe apko 5% interest dena hai aur khud ke paise pe ap expect karte ho ki 10% ayega return. (Imagine tax rate is 20%)

To in paise ko arrange karne ka cost is cost of capital which is 0.6×(0.05×0.8) + 0.4×0.1= 0.064 or 6.4 is your cost to get this much capital to start your business.

I hope it helps.

I think option C is unnecessarily written because why would he take permission from organization when he himself is a member of board rather he has helped organization itself by posting in his newsletter about fund raising to his clients. Since he did not gave any other sensitive information of client therefore option A is correct.

Since you have not posted the entire picture of question its bit difficult to understand what actually is given.

But reading what is available here I can say that they have given IVs of all the strike prices of a stock and want to test that part.

So, as we know that higher the volatility, higher the premiums. Therefore option B is wrong because it says stablishing long position with out of the money options is more expensive. It is totally wrong as we can see out of the money strikes IVs are low that mean their premiums will not be that high as compare to At the money and In the money options. So, they are less expensive.

Option C is wrong because it is correct with respect to short position only not with respect to long position (Reason stated above)

Hence A is the correct answer as it says using out of the money options is expensive which is true if he buy OTM put options as IVs are high so their premiums as compare to going long with OTM call options.