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:

Role Ambiguity

The uncertainty experienced by employees due to unclear job roles, responsibilities, or expectations, often leading to stress and reduced job performance.

Relationship-Oriented Leadership

A leadership style that focuses on building strong interpersonal relationships, emphasizing emotional support, and establishing positive connections within a team.

Fiedler's Contingency Theory

A leadership model proposing that effective leadership is dependent on the match between a leader's style and the demands of the situation.

Path-Goal Theory

A leadership theory that suggests a leader's behavior is contingent to the satisfaction, motivation, and performance of their subordinates, and that it should align with the employees' goals.