Use the Information for the Question(s)below

question 31

Multiple Choice

Use the information for the question(s) below.
The current price of KD Industries stock is $20.In the next year the stock price will either go up by 20% or go down by 20%.KD pays no dividends.The one-year risk-free rate is 5% and will remain constant.
-Using the binomial pricing model,the calculated price of a one-year put option on KD stock with a strike price of $20 is closest to:

• A)$2.00.
• B)$1.45.
• C)$2.40.
• D)$2.15.

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Definitions:

Abuse of Power

The misuse of authority by someone in a position of power, often to gain personally or to advantage someone close to the abuser.

Revictimization

The phenomenon where an individual who has experienced victimization once suffers additional episodes, further exacerbating their vulnerability.

Depression

A mental health disorder marked by persistent feelings of sadness, loss of interest, and a lack of energy.

Negative Self-Concept

The perception of oneself in a negative light, often marked by feelings of inadequacy, unworthiness, or lack of self-esteem.