Assume a Stock Price of $21

question 59

Multiple Choice

Assume a stock price of $21.80, an exercise price of $20, three months to expiration, a risk-free rate of 3.40 percent, standard deviation of 46 percent, and a d₁ value of .52664. What is the value of d₂ as it is used in the Black-Scholes option pricing model?

• A) .31218
• B) .31225
• C) .29664
• D) .29535
• E) .31340

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Definitions:

Synergy

The interaction or cooperation of two or more organizations, substances, or other agents to produce a combined effect greater than the sum of their separate effects.

Similar Thinking Patterns

The tendency of individuals to have comparable approaches to reasoning, problem-solving, and interpreting information.

Purposeful Action

An intentional act with a clear goal or objective in mind.

Sustained Improvement

Continuous and consistent enhancement in performance, quality, or efficiency over time.