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Business, 12.08.2020 07:01 darlene93

You have the following information about LearnMore Inc.’s stock and a two-month call option with a strike price of $76.80. LearnMore Inc.’s current stock price is $64.00. You are using the multiperiod binomial option pricing model to find the value of the two-month option with two periods. ∏u and ∏d values given here apply to any period. Data Collected for LearnMore Inc. u 1.4010 d 0.4592 ∏u 0.2093 ∏d 0.3643 You work with a junior analyst to calculate the value of the option, and she submits her inferences to you. Which of the following points are true in the case of LearnMore Inc.’s stock options? Check all that apply. The option payoff if the stock goes up in one month will be $12.86. LearnMore Inc.’s stock price after one month likely will be $89.66 if the stock goes up by a factor of 1.4010. The value of the one-month call option with a strike price of $76.80 at the end of one month will be $2.69. The value of the call option will always remain $2.69, irrespective of the time until expiration.

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