Binomial Pricing: Assume That the Shares of Gizmo Motors Are

question 29

Multiple Choice

Binomial pricing: Assume that the shares of Gizmo Motors are currently trading for $18 and will either rise to $30 or fall to $12 in one year. The risk-free rate for one year is 0 per cent. What is the value of a put option with a strike price of $15?

• A) $0
• B) $2
• C) $5
• D) $6

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Definitions:

Ethical Philosophy

Ethical philosophy explores the fundamental questions of right and wrong, virtue and vice, and moral responsibility.

Ethical Codes

Formalized sets of ethical guidelines developed by some companies for use at all levels of an organization.

Formalized Sets

Established or official groups or collections of objects, rules, or standards that are systematically organized.

Guidelines

Recommended principles or practices that serve as a framework or advice for conduct or action.