Use the Information for the Question(s)below

question 9

Essay

Use the information for the question(s)below.
The current price of Kinston Corporation stock is $10.In each of the next two years,this stock price can either go up by $3.00 or go down by $2.00.Kinston stock pays no dividends.The one-year risk-free interest rate is 5% and will remain constant.
-Using risk-neutral probabilities,calculate the price of a two-year put option on Kinston stock with a strike price of $9.

---

Definitions:

Unemployed

The state of being without a paid job, but available and seeking work.

Substance Abuse

The harmful or hazardous use of psychoactive substances, including alcohol and illicit drugs.

Adjustment Disorder

Stress-related disorder that involves emotional and behavioral symptoms (depressive symptoms, anxiety symptoms, and/or antisocial behaviors) that arise within 3 months of the onset of a stressor.

Involuntary Admissions

The process of admitting individuals to a psychiatric facility without their consent, typically when they are deemed a danger to themselves or others.