The Current Price of a Stock Is $100

question 3

Multiple Choice

The current price of a stock is $100.What is the Black-Scholes model price of a six-month put option at strike $98,given an interest rate of 2% and a dividend rate of 1%? The volatility is 45%.

• A)$11.02
• B)$11.22
• C)$11.68
• D)$11.73

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Definitions:

Plantwide Overhead Rate

This is a single overhead rate calculated by dividing all of a plant's manufacturing overhead costs by its total activity base, such as labor hours or machine hours, used across the entire factory.

Direct Labor-Hour

A unit of measure representing the labor time expended by workers directly involved in the manufacturing process, often used in cost accounting.

Activity-Based Costing

is a costing methodology that assigns overhead and indirect costs to specific products or services based on their consumption of resources.

Activity-Based Costing

An accounting method that assigns costs to products based on the activities performed for the product, providing more accurate cost information.