The Buckingham Casino Offers to Give Every Gambler One Share

question 7

Multiple Choice

The Buckingham Casino offers to give every gambler one share of Buckingham Casino Corp.stock if the price drops below $40.00,as an incentive to spur business.If S = $45.25,σ = 0.15,r = 0.05 and div = 0,how much is this offer worth if it expires in 30 days?

• A) $0.36
• B) $0.26
• C) $0.16
• D) $0.06

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Definitions:

Machines

Mechanical or electrical devices that perform tasks, usually operated by power or manual effort, designed to aid in work or accomplish specific functions.

Marginal Revenue Product

The additional revenue generated by employing one more unit of a factor, such as labor or capital, keeping other factors constant.

Wage Rate

The wage rate is the amount of money earned per unit of time, such as an hour, by an employee.

Repair People

Individuals or workers specialized in fixing and maintaining machinery, equipment, or facilities.