Assume That the Stock of XYZ, Inc

question 97

Multiple Choice

Assume that the stock of XYZ, Inc., is currently trading for $18 and will either rise to $24 or fall to $13 in one year. The risk-free rate for one year is 11 percent. What is the value of a call option with a strike price of $26?

• A) $0
• B) $5.23
• C) $7.72
• D) $2.00

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Definitions:

Humanistic Psychology

A branch of psychology focused on the “whole person,” including free will, creativity, and human potential.

Hierarchy Of Needs

Maslow's theory proposing that human beings have a set of motivation systems unrelated to rewards or unconscious desires, typically depicted as a five-tier model of human needs.

Pyramidal Hierarchy

A system of organization where every entity in the organization, except one, is subordinate to a single other entity.

Hierarchy Of Needs

A theory in psychology proposed by Abraham Maslow that prioritizes human needs from the most basic such as physiological needs, to higher levels of needs such as self-actualization.