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

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Definitions:

Realistic Job Previews

A technique used in the recruiting process that provides potential employees with a truthful view of what working in the job will be like, including both positive and negative aspects.

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Mentors

are experienced professionals who provide guidance, knowledge, and support to less experienced individuals within a workplace or educational setting.

Older Workers

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