A Stock Is Trading at 100 $u = 1.20$ And $d = 0.80$

question 37

Multiple Choice

A stock is trading at 100. Consider a two-period binomial model in which the stock price moves up or down each period by factors $u = 1.20$ and $d = 0.80$ , respectively. Suppose the gross risk-free rate of interest per time-step is 1.04. In this setting, the price of a two-period cash-or-nothing binary put option with a strike of 100 that pays $100 if it finishes in-the-money is

• A) $36.
• B) $33.28
• C) $64.
• D) $59.17.

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Definitions:

Emotion Recognition

The ability to identify and understand the emotions of others, typically through facial expressions, body language, and vocal tones.

Sexual Dimorphism

Differential development of brain areas in the two sexes.

Brain Development

Brain development refers to the process of growth and maturation of the brain over time, involving changes in structure, function, and complexity.

Gender Development

The process by which individuals develop their gender identity and roles, influenced by biological, social, and environmental factors.