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.

---

Definitions:

Conformity to Norms

The act of aligning behaviors, attitudes, and practices with the established standards or expectations of a group or society.

Team Performance

The level of effectiveness and efficiency with which a team achieves its goals and objectives.

Norming Stage

The third stage of team development, in which team members resolve conflicts, develop cohesion, and start to work more efficiently towards their objectives with established norms and structures.

Emotionality

The quality or state of being emotional; the capacity or tendency to perceive or express emotions.