Suppose ABCD's Stock Price Is Currently $50

question 29

Multiple Choice

Suppose ABCD's stock price is currently $50.In the next six months it will either fall to $40 or rise to $80.What is the current value of a six-month call option with an exercise price of $50? The six-month risk-free interest rate is 2 percent (periodic rate) .

• A)$2.40
• B)$15
• C)$8.25
• D)$8.09

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Definitions:

Competence

The ability to do something successfully or efficiently.

Sexual Objectification

The tendency to think about women in a narrow way as objects rather than full humans, as if their physical appearance is all that matters.

Stereotype Threat

The risk of confirming negative stereotypes about an individual's racial, ethnic, gender, or cultural group, which can hinder their performance.

Institutional Discrimination

A systemic discrimination that occurs within institutions like schools, companies, and governments, where policies, practices, or procedures cause unequal treatment of particular groups.