A Futures Price Is Currently 40 Cents

question 2

Multiple Choice

A futures price is currently 40 cents.It is expected to move up to 44 cents or down to 34 cents in the next six months.The risk-free interest rate is 6%.What is the value of a six-month put option with a strike price of 37 cents?

• A) 3.00 cents
• B) 2.91 cents
• C) 1.16 cents
• D) 1.20 cents

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Definitions:

Human Resource Audits

A comprehensive method of objectively and systematically evaluating the effectiveness of an organization's HR policies, procedures, and strategies.

Transitional Probability Matrices

In mathematics and statistics, these matrices are used to describe the probabilities of transitioning from one state to another in a stochastic (random) process.

Markov Analysis

A statistical method used to predict future states based on current data and the probabilities of various outcomes, often applied in decision-making processes.

HR Objectives

The strategic goals set by the Human Resources department to support overall organizational growth, employee development, and operational efficiency.