Use the Information for the Question(s) Below

question 16

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.
-Assuming the beta on KD stock is 1.1,the calculated beta for a one-year call option on KD stock with a strike price of $20 is closest to:

• A) -1.8
• B) 2.4
• C) -7.7
• D) 4.6

---

Definitions:

Behavior Rating Scales

Tools used to assess an individual's behaviors, attitudes, or emotional states, often utilized in psychological or educational settings.

The Counselor

A professional who provides guidance and support to individuals or groups, often in educational, vocational, or psychological contexts.

The Client

In a professional context, refers to an individual or organization that receives services or advice from a professional such as a consultant, lawyer, or therapist.

Observer Drift

A phenomenon in which there is a gradual shift in the way observers record or interpret information over time, leading to inconsistencies.