A Stock with a Current Price of $18 Will Either

question 16

Multiple Choice

A stock with a current price of $18 will either move up by a factor of 1.2 or down by a factor of .9 each period over the next two periods. The risk-free rate of interest is 4.5%. What is the current value of a call option with a strike price of $20?

• A)$1.02
• B)$1.08
• C)$1.17
• D)$1.21
• E)$1.27

---

Definitions:

Sense Of Mission

A strong feeling of having a specific and important purpose or duty to fulfill.

Goals

Objectives or desired outcomes that an individual or organization aims to achieve within a specific timeframe.

Leadership

The act of guiding or influencing others towards the achievement of goals, characterized by inspiration, vision, and the ability to direct.

Coercive Power

Coercive power is an authoritative strategy based on the fear of punishment or the enforcement of discipline to influence others to comply with demands or expectations.