A Stock with a Current Price of $43 Will Either

question 56

Multiple Choice

A stock with a current price of $43 will either move up by a factor of 1.20 or down by a factor of .80 each period over the next two periods. The risk-free rate of interest is 3%. What is the current value of a call option with a strike price of $45?

• A)$4.38
• B)$4.55
• C)$4.72
• D)$5.16
• E)$5.27

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Definitions:

Root Reinforcement

Additional material added at the root of a weld joint to ensure the joint has sufficient thickness and strength.

Groove Welds

Welds that fill in the groove between two adjacent components to join them, used in various types of joint designs.

Contour

The outline or surface form of an object, which can be represented graphically or through mathematical equations in design and analysis.

Weld Symbol

A weld symbol is a set of standardized symbols used in blueprints and technical drawings to specify the type, size, and other details of a weld to be made on metal parts.