Let’s walk through how we would price a put in a two-state pricing model. Suppose the current price of the stock is $83. The stock pays no dividends and will be worth $90 if the economy booms and $80 if the economy stalls one year from now. Suppose also that the risk-free rate is 3% per year. (6a) Suppose we have a (European) put with time to expiration of 1 year, and a strike price of $85. What is the price of this put option?

Which of the following is likely not a benefit of requiring a grand jury to listen to and examine all of the evidence against a person suspected of committing a serious crime and then independently deciding whether or not to hand down an indictment? 1.the grand jury system provides the accused another safeguard against being sent to trial and facing conviction based on flawed evidence. 2.the members of the grand jury are drawn from the community and are empowered to render independent decisions about whether or not the government has collected enough evidence to bring an individual to trial. 3.the grand jury’s decision can provide prosecutors insight into what is necessary to build a sufficient case if a similar crime is presented later. 4.the grand jury is impaneled to rubber-stamp prosecutors’ cases, which makes it possible for more cases to reach trial.