Use the Information for the Question(s)below

question 14

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 risk-neutral probabilities,the calculated price of a one-year call option on KD stock with a strike price of $20 is closest to:

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

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Definitions:

Unconscious Ideas

Thoughts, memories, and desires not present in the immediate field of awareness but that influence emotions and behavior.

Childhood Conflicts

Psychological struggles experienced during childhood that can significantly influence personality development and behavior.

Behaviorist

A psychologist who studies behavior, emphasizing the external behaviors of people and their reactions on the environment over internal processes.

Psychological Perspectives

Viewpoints or approaches within psychology that emphasize different aspects of human behavior and mental processes.