chap10

# K40s3790r5035 a 205 b 210 c 296 d 308 answer

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Unformatted text preview: of 6.0% and an exercise price of \$50? A) .2145 0 B) .3254 0 C) .5411 0 D) .6154 0 Answer: D 13) or an option trading in the money, what is the likely impact on the binomial option price as F the number of binomial steps is increased? A) he price will fall T B) he price will increase T C) he price will remain constant T D) he impact can not be determined T Answer: A 14) hat is the binomial option price assuming the following data on a 6-month call option, W using 3-month intervals as the time period? K = \$40, S = \$37.90, r = 5.0%, = .35 A) 2.05 \$ B) 2.10 \$ C) 2.96 \$ D) 3.08 \$ Answer: D 15) ssume the following data on a 6-month call option, using 3-month intervals as the time A period. K = \$70, S = \$68.50, r = 6.0%, = .32. What is the highest possible stock price associated with this data and the binomial pricing model? A) 51.26 \$ B) 68.50 \$ C) 70.59 \$ D) 91.21 \$ Answer: D 16) ssume the following data on a 6-month put option, using 3-month intervals as the time A period. K = \$40.00, S = \$37.90, r = 5.0%, = .35. What is the binomial optio...
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