Binomial Pricing: Assume That the Stock of ABC, Inc

question 104

Multiple Choice

Binomial pricing: Assume that the stock of ABC, Inc., is currently trading for $22 and will either rise to $31 or fall to $18 in one year. The risk-free rate for one year is 0 percent. What is the value of a put option with a strike price of $25?

• A) $0
• B) $1.85
• C) $3.00
• D) $4.85

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