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.

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Definitions:

Positron Emission Tomography

A diagnostic imaging technique that uses radioactive tracers to visualize and measure changes in metabolic processes within the body.

Dopamine

Dopamine is a neurotransmitter in the brain that plays a vital role in controlling movement, mood, and motivation, among other functions.

Postsynaptic Neuron

The neuron that receives a signal (neurotransmitters) from another neuron at a synapse, following the presynaptic neuron.

Stimulant Drug

Substances that increase activity in the central nervous system, resulting in increased alertness and energy.