Use the Information for the Question(s)below

question 37

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 the binomial pricing model,the calculated price of a one-year call option on KD stock with a strike price of $20 is closest to:

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

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Definitions:

Abrasive

A material or substance used for grinding or polishing, or a personality trait characterized by harshness or a lack of tact.

Emotional Intelligence

The capacity to be aware of, control, and express one's emotions, and to handle interpersonal relationships judiciously and empathetically.

Self-Awareness

Self-Awareness involves the conscious knowledge of one’s own character, feelings, motives, and desires, playing a critical role in personal development.

Cross-Cultural

Involving or bridging the differences between cultures, often with a focus on understanding and interaction.