Suppose a Stock Is Currently Trading for $23,and in One

question 18

Multiple Choice

Suppose a stock is currently trading for $23,and in one period it will either increase to $30 or decrease to $20.If the one-period risk-free rate is 5%,what is the price of a European call option that expires in one period and has an exercise price of $25?

• A)$1.25
• B)$1.98
• C)$1.50
• D)$2.21
• E)$2.50

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Definitions:

Rational Culture

A type of organizational culture that emphasizes logic, efficiency, and formal structures to achieve business goals.

Observable Culture

The visible and tangible elements of organizational culture, such as rituals, dress codes, and behaviors that can be noticed by others.

Tech Consulting

The service of providing expertise and advice to businesses on how to use technology to achieve their objectives, improve processes, or solve problems.

Reward And Recognition

The practice of acknowledging and giving incentives to employees for their achievements and contributions.