In the Case of a 1-Year Option,the Current Stock Price

question 3

Multiple Choice

In the case of a 1-year option,the current stock price is $52 per share.If the stock price has an equal chance of ending the year at either $58 or $45,what is the △ given an interest rate of 6.0% and an exercise price of $50?

• A) 0.2145
• B) 0.3254
• C) 0.5411
• D) 0.6154

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Definitions:

Percent Change

A measure that indicates the relative difference between an initial value and a final value, expressed as a percentage.

Wrong Amount

The incorrect calculation or entry of a figure in accounting records, transactions, or financial statements.

Account Balance

The amount of money present in a financial account at any given time.

Posting Errors

Mistakes that occur when financial data is incorrectly recorded or entered into the accounting system.