Using the Binomial Model, What Is the Value of a Three

question 50

Multiple Choice

Using the binomial model, what is the value of a three month option given the following data and assuming there are no time periods other than three months? The exercise price is
$40; stock price is $46; the upside price is $48; the downside price is $34; the 3 month interest rate is 2%. The upside and down side have equal probabilities.

• A) $3.92
• B) $4.00
• C) $5.88
• D) $6.00

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A psychiatric condition that involves alterations in cognition, perception, feelings, speech, self-identity, and actions.

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