Use the Information for the Question(s)below

question 14

Multiple Choice

Use the information for the question(s) below.
The current price of KD Industries stock is $20.In the next year the stock price will either go up by 20% or go down by 20%.KD pays no dividends.The one-year risk-free rate is 5% and will remain constant.
-Using risk-neutral probabilities,the calculated price of a one-year call option on KD stock with a strike price of $20 is closest to:

• A)$1.45.
• B)$2.40.
• C)$2.00.
• D)$2.15.

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Definitions:

Epigenetic

Refers to the study of changes in organisms caused by modification of gene expression rather than alteration of the genetic code itself.

Biological Parents

The individuals from whom a person inherits their genetic traits, typically referred to as the mother and father.

Adoptive Parents

are individuals who become the legal parents of a child through the process of adoption.

Outgoingness

A personality trait characterizing individuals who are friendly, sociable, and willing to engage in social interactions.