Use the Information for the Question(s)below

question 13

Essay

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.
-Construct a binomial tree detailing the option information and payoffs for a call option with a $20 strike price that expires in one year.

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Definitions:

Dementia

A broad category of brain diseases that result in a long-term and often gradual decrease in the ability to think and remember, significantly affecting a person's daily functioning.

Health

A state of complete physical, mental, and social well-being, not merely the absence of disease or infirmity.

Older People

Individuals who are generally considered to be in the later stages of the human life span, often defined as 65 years and older.

Memory Loss

The inability to remember information or experiences, ranging from temporary forgetfulness to long-term memory impairments, such as amnesia.