Use the Information for the Question(s)below

question 11

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.
-The risk-neutral probability of a down state for KD Industries is closest to:

• A)37.5%.
• B)62.5%.
• C)40.0%.
• D)60.0%.

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Definitions:

Interest Group Politics

involves organized groups that seek to influence public policy and government decisions without seeking electoral office, often through lobbying and advocacy.

Public Interest Groups

Organizations that aim to influence public policy and decision-making in favor of the general welfare or the interests of the public at large.

Government Action

Refers to any activity or initiative undertaken by a governmental body, ranging from policy decisions to legislative enactments and enforcement measures.

Louvre

A world-renowned museum in Paris, France, known for its vast collection of art and historical artifacts, including the Mona Lisa.