If the Volatility of a Stock Is 20% Per Annum

question 6

Multiple Choice

If the volatility of a stock is 20% per annum and a risk-free rate is 5% per annum, which of the following is closest to the Cox, Ross, Rubinstein parameter p for a tree with a three-month time step?

• A) 0.50
• B) 0.54
• C) 0.58
• D) 0.62

Discern the role of creativity, problem-solving strategies, and bias in cognitive psychology.

Identify the different theories and components of intelligence according to renowned psychologists.

Acknowledge the impact of developmental and genetic factors on cognitive abilities and intelligence.

Recognize the significance of algorithms, heuristics, and set theories in solving problems and making decisions.

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Definitions:

Standard Rate of Pay

The regular amount of pay given for standard work hours or for performing a standard task or job.

Unfavorable Variance

The difference between actual costs and standard or budgeted costs when actual costs are higher, indicating lower profitability.

Actual Costs

The real, specific expenses incurred or required to perform an operation, produce an item, or offer a service.

Standard Costs

Predetermined costs to manufacture a single unit or a number of units during a specific period under current or anticipated operating conditions.