Exhibit 22.6 Use the Information Below for the Following Problem(S)

question 105

Multiple Choice

Exhibit 22.6
Use the Information Below for the Following Problem(S)
The following information is provided in the context of a two period (two six month periods) binomial option pricing model. A stock currently trades at $60 per share, a call option on the stock has an exercise price of $65. The stock is equally likely to rise by 15% or fall by 15% during each six month period. The one-year risk free rate is 3%.
-Refer to Exhibit 22.6.Calculate the possible prices of the stock at the end of one year.

• A) $69, $51, $79.35
• B) $51, $79.35, $58.65
• C) $79.35, $58.65, $43.35
• D) $58.65, $43.35, $14.35
• E) None of the above

---

Definitions:

Negative Views

Perspectives or opinions that reflect a lack of approval, optimism, or positivity regarding certain topics or situations.

Music Videos

Short films integrating a song and imagery, designed for promotional or artistic purposes in the music industry.

Objectify Women

The practice of treating or regarding women as objects without regard to their personality or dignity, often reducing them to their physical appearances or sexual functions.

American Psychological Association

A leading scientific and professional organization representing psychology in the United States, dedicated to advancing the creation, communication, and application of psychological knowledge.