Use the Two-State Put-Option Value in This Problem

question 43

Multiple Choice

Use the two-state put-option value in this problem. S_O = $100; X = $120; the two possibilities for S_T are $150 and $80. The range of P across the two states is _____, and the hedge ratio is _______.

• A) $0 and $40; −4/7
• B) $0 and $50; +4/7
• C) $0 and $40; +4/7
• D) $0 and $50; −4/7
• E) $20 and $40; +1/2

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Definitions:

Developmental Outcomes

The results or changes in an individual’s capabilities or behaviors over time due to growth and experience.

Positive Youth Development

A general approach to adolescence that emphasizes the strengths and positive qualities of youth that contribute to their psychological health as well as to the welfare of their communities.

Psychological Health

A state of well-being where an individual realizes their abilities, can cope with normal stresses of life, and can work productively.

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The physical, psychological, emotional, and social growth and changes that occur during the period of transition from childhood to adulthood.