In a One-Period Binomial Model, Assume That the Current Stock

question 8

Multiple Choice

In a one-period binomial model, assume that the current stock price is $100, and that it will rise to $110 or fall to $90 after one month. If the risk-free rate is 0.1668% per month in simple terms, what is the price of a 99-strike one-month put option?

• A) $4.02
• B) $4.42
• C) $4.49
• D) $4.57

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Definitions:

Behavioral Intentions

An individual's planned or anticipated actions in a given situation, often studied in psychology and marketing as precursors to actual behavior.

Extended Fishbein

A model that extends the original Fishbein attitude model to incorporate additional predictors of behavior, including the subjective norm and perceived behavioral control.

Actual Behaviour

The real, observable actions performed by an individual, as opposed to intentions or beliefs.

Multi-attribute Attitude Models

Psychological models that describe how consumers evaluate products and services based on perceived attributes and how these evaluations influence their purchasing decisions.