Use the Two-State Put Option Value in This Problem

question 81

Multiple Choice

Use the two-state put option value in this problem.S_O = $100; X = $120; the two possibilities for S_T are $150 and $80.The range of P across the two states is _____ the hedge ratio is _______.

• A)$0 and $40; -4/7
• B)$0 and $50; +4/7
• C)$0 and $40; +4/7
• D)$0 and $50; -4/7
• E)$20 and $40; +1/2

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Definitions:

Collective Unconscious

A concept proposed by Carl Jung referring to the part of the unconscious mind that holds shared experiences and cultural elements across humanity.

Archetypes

Archetypes are universally recognized symbols, themes, or patterns that recur in myths, stories, and dreams, often used in the study of psychology by Carl Jung.

Ancestral Memories

The inherited patterns of thought, feeling, and behavior that are passed down from one generation to the next.

Response Tendencies

Patterns or predispositions in the way individuals react to certain stimuli or situations, often influenced by psychological factors.