Suppose S = 70,X = 65,r = 0

question 29

Multiple Choice

Suppose S = 70,X = 65,r = 0.05,p = 0.6,C_u = 7.17,C_d = 1.22 and there is one period left in an American call's life.What will the option be worth?

• A)6.83
• B)0.00
• C)4.56
• D)5.00
• E)none of the above

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Definitions:

Salary

A steady payment made by an employer to an employee, usually on a monthly or biweekly schedule, although it's frequently presented as a yearly total.

Minimum Wage

The hourly rate that federal law allows as the least hourly rate to be paid to an employee in the United States.

Hourly Rate

The amount of money paid for each hour of work performed, typically used as a measure of compensation for part-time or contract employees.

FICA Taxes

Taxes collected in the United States to fund Social Security and Medicare, typically deducted from employees' paychecks.