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:

Demand

The level of demand for goods or services that customers are prepared and can afford across a range of prices within a certain period.

Price Change

A fluctuation in the cost of a good or service in the market.

Decrease in Quantity

A reduction in the amount or number of a particular good or service.

Supply Curve

a graphical representation showing the relationship between the price of a product and the amount of the product that producers are willing to supply.