Match the correct figure to his or her place of origin:

Questions

Mаtch the cоrrect figure tо his оr her plаce of origin:

Pleаse аnswer questiоns (1) ~ (10) in the textbоx belоw.A stock is currently selling for $64. In one period, the stock will move up by а factor of 1.20 or down by a factor of 0.85. The risk-free rate of interest is 4 percent, and the strike price is $70.(1) What is the up price (i.e., stock price in the high state, SH)? (4 points)A) $54.40, B) $60.27, C) $64.00, D) $70.00, E) $76.80(2) What is the down price (i.e., stock price in the low state, SL)? (4 points)A) $44.59, B) $49.00, C) $54.40, D) $59.00, E) $64.00(3) What is the value of the call option in up price (i.e., call option price in the high state, CH)? (4 points)A) $0.00, B) $1.27, C) $6.80, D) $17.80, E) $76.80(4) What is the value of the call option in down price (i.e., call option price in the low state, CL)? (4 points)A) $0.00, B) $1.27, C) $4.40, D) $6.80, E) -$15.60(5) What is the delta (i.e., the number of shares of the stock)? (4 points)A) 0.081, B) 0.250, C) 0.304, D) 0.359, E) 0.543(6) What is the B (i.e., the number of dollars in the risk-free asset)? (4 points)A) $0.00, B) -$3.52, C) -$6.80, D) -$15.88, E) -$64.00(7) What is the price of the call option today (i.e., C₀)? (4 points)A) $0.45, B) $1.27, C) $2.50, D) $3.55, E) $6.80(8) What is the risk-neutral probability (i.e., π)? (4 points)A) 0.081, B) 0.250, C) 0.359, D) 0.543, E) 0.850(9) What is the option price today C₀ using the risk neutral probabilities approach? (4 points)A) $0.45, B) $1.27, C) $2.50, D) $3.55, E) $6.80(10) Do the two valuation methods, that is, the replicating portfolio approach and the risk-neutral probability approach, give the same call option price? (4 points)A) Yes, they should produce the same option price.B) No, they only match when volatility is high.C) No, the replicating method gives a higher value.D) No, the risk-neutral method gives a lower value.E) No, they only match when the option finishes in the money.