Note: Correct Answers to Later Questions Are Dependent on Correct

question 21

Multiple Choice

Note: Correct answers to later questions are dependent on correct answers to earlier questions.
-Ima Greedy,the CFO of Financial Saving Techniques has been granted options on 200,000 shares. The stock is currently trading at $22 a share and the options are at the money. The variance of the stock has been about .07 on an annual basis over the last several years. The options mature in 3 years and the risk free rate is 4%.
What is d₂?

• A) .0121
• B) .0252
• C) .0326
• D) .0452
• E) .0525

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Definitions:

Full Employment

Employment level when there is no cyclical unemployment.

Command Economy

An economic system where the government makes all decisions regarding what goods should be produced, how they should be produced, and who gets them.

Inefficiency

A lack of efficiency, where resources are not utilized in the best possible manner, often leading to waste or lost opportunities.

Highest-valued Uses

Refers to the allocation of resources where they can generate the highest possible value or benefit, optimizing economic efficiency.