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THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION

question 32

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THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:
Suppose you flip a coin four times.For every head,you receive one point,and for every tail,you lose one point.
-What is the probability that the mean number of points you receive on four flips is 0.5?


Definitions:

Call Option

A financial contract giving the buyer the right, but not the obligation, to buy a stock, bond, commodity, or other asset at a specified price within a specified time.

Black-Scholes

A mathematical model used to estimate the theoretical price of European put and call options, considering factors such as risk-free rate, volatility, and time.

Instantaneous Risk-free Rate

The theoretical rate of return of an investment with no risk of financial loss, typically considered as a very short-term government bond yield.

Hedge Ratio

The ratio of the size of a position in a hedging instrument to the size of the position being hedged.

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