What Is the Binomial Option Price Assuming the Following Data

question 12

Multiple Choice

What is the binomial option price assuming the following data on a 6-month call option, using 3-month intervals as the time period? K = $40, S = $37.90, r = 5.0%, = .35

• A) $ 2.05
• B) $ 2.10
• C) $ 2.96
• D) $ 3.08

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Definitions:

Rehearsal

A cognitive process involving the conscious repetition of information to be remembered, facilitating its transfer to long-term memory.

Speed-reading

A collection of reading methods that increase the speed and efficiency of reading without greatly reducing comprehension or retention.

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The phenomenon where vividly imagining an event can increase confidence that it actually occurred.

Source Amnesia

A memory disorder where an individual is unable to remember the source of a specific memory while retaining the factual content.