Use the Information for the Question(s)below

question 25

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 the binomial pricing model,calculate the price of a two-year call option on Kinston stock with a strike price of $9.

---

Definitions:

Inventory Carrying Costs

The total costs associated with holding inventory, including storage, insurance, taxes, opportunity costs, and depreciation.

Real Estate Agencies

Businesses that facilitate the buying, selling, leasing, or renting of real estate properties.

Hospitals

Health care institutions providing patient treatment with specialized medical and nursing staff and medical equipment.

Inventory Carrying Cost

The complete expense linked to maintaining stock, encompassing storage, insurance, the decrease in value over time, and the cost of missed opportunities.