FIN 534 RANK Imagine Your Future /fin534rank.com FIN 534 RANK Imagine Your Future /fin534rank.com | Page 11

Which of the following statements is CORRECT?
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Question 29
Which of the following statements is CORRECT?
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Question 30
The capital intensity ratio is generally defined as follows:
FIN 534 Final Exam Part 1 Set 2
FIN 534 Final Exam Part 1
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The current price of a stock is $22, and at the end of one year its
price will be either $27 or $17. The annual risk-free rate is 6.0%, based
on daily compounding. A 1-year call option on the stock, with an
exercise price of $22, is available. Based on the binomial model, what is
the option's value? (Hint: Use daily compounding.)