Consider a Stock Index Currently Trading at 128 $u = 1.08$

question 2

Multiple Choice

Consider a stock index currently trading at 128.You have modeled the evolution of this index in a binomial tree and have come up with the following parameters: $u = 1.08$ , $d = 0.93$ .The gross risk-free rate per step of the binomial tree is $R = 1.03$ and the dividend yield on the index is $\delta = 0.01$ .What is the price of a one-period put option with a strike of $K = 130$ ?

• A)7.93
• B)7.09
• C)7.02
• D)6.36

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Definitions:

COUNT Aggregate Function

A function in SQL that returns the number of items in a group, often used in queries to count the number of records that match certain criteria.

Query Design View

A graphical interface in database software that allows users to design or modify queries by visually arranging tables and setting criteria.

Values

Represents the data encoded within variables or constants in programming and computing contexts.

Table Datasheet View

A view in database software that displays data in rows and columns, similar to a spreadsheet, allowing for data entry and editing.