In a One-Period Binomial Model,assume That the Current Stock Price

question 9

Multiple Choice

In a one-period binomial model,assume that the current stock price is $100,and that it will rise to $110 or fall to $90 after one month.If the risk-free rate is 0.1668% per month in simple terms,what is the price of a 99-strike one-month put option?

• A)$4.02
• B)$4.42
• C)$4.49
• D)$4.57

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Definitions:

Implementation Justification

The rationale and reasoning provided for proceeding with a particular project or strategy, highlighting the anticipated benefits and outcomes.

Multinational

A corporation that operates and has assets in more than one country, often managing production or delivering services in various international markets.

Domestic

Pertains to something that is within, originates from, or is related specifically to a country's internal affairs.

Global

Pertaining to or involving the entire world, often in context of business operations, concerns, or impacts that are worldwide in scope.