For the Same Problem in the Preceding Two Questions,find the State

question 23

Multiple Choice

For the same problem in the preceding two questions,find the state price at the middle node after two periods,given that the 117.3008--strike call is priced at $4 and the 85.2509--strike put is priced at $4,both options of two-months maturity.Assume that the middle node after two periods has the same stock price as the initial stock price.

• A)0.5016
• B)0.5023
• C)0.5044
• D)0.5117

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Definitions:

Insurance Policy

A contract between an insurer and a policyholder specifying the terms for payout in the event of loss or damage.

Supplies On Account

Goods or items purchased on credit, where payment is deferred to a future date, typically recorded as a liability until paid.

Debit And Credit

Debit and credit are fundamental categories used in accounting to record and maintain financial transactions, where debit refers to the left side of an account and credit refers to the right side.

Insurance Advance

A payment made in advance by an insurance company, typically for claims or benefits before the final settlement.