Suppose ACC's Stock Price Is Currently $25

question 54

Multiple Choice

Suppose ACC's stock price is currently $25.In the next six months it will either fall to $15 or rise to $40.What is the current value of a six-month call option with an exercise price of $20? The six-month risk-free interest rate is 5 percent per six-month period.(Use the replicating portfolio method.)

• A)$20
• B)$8.57
• C)$9.52
• D)$13.10

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Definitions:

Achievement Goal

An objective oriented towards demonstrating competence or attaining a standard of excellence in a task or competition.

Goal Theory

A psychological framework focusing on motivation and explaining how individuals set goals and how these goals influence their behavior and performance.

Approach Goals

Objectives focused on achieving a positive outcome or advancing towards a desired end.

Avoidance Goals

Targets aimed at preventing undesirable outcomes, as opposed to pursuing positive outcomes.