The Current Price of a Non-Dividend Paying Stock Is $30

question 4

Multiple Choice

The current price of a non-dividend paying stock is $30.Use a two-step tree to value a European call option on the stock with a strike price of $32 that expires in 6 months.Each step is 3 months,the risk free rate is 8% per annum with continuous compounding.What is the option price when u = 1.1 and d = 0.9?

• A) $1.29
• B) $1.49
• C) $1.69
• D) $1.89

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Definitions:

Social Leadership

The aspect of leadership focused on establishing directions, influencing others, and initiating changes within a social context.

Positive Reinforcement

The addition of a rewarding stimulus following a desired behavior, encouraging the likelihood of the behavior being repeated.

Leadership Strategies

approaches and techniques used by leaders to inspire, influence, and guide others towards achieving goals and fulfilling a mission.

Collectivist Societies

Communities where individuals prioritize the needs and goals of the group over personal ambitions or desires.