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You have the following information about Learn More Inc.'s stock and a two-month call option with a strike price of $196.00. Learn More Inc.'s current
You have the following information about Learn More Inc.'s stock and a two-month call option with a strike price of $196.00. Learn More Inc.'s current stock price is $140.00. You are using the multiperiod binomial option pricing model to find the value of the two-month option with two periods. Iu and a values given here apply to any period. Data Collected for Learn More Inc. u d u 1.1383 0.5740 0.4072 0.6141 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 Learn More Inc.'s stock options? Check all that apply. The option payoff if the stock goes down in each of the next two will be $0.00. If the price goes up by a factor of 1.1383 over the first month,t he value of the call option with a strike price of $196.00 will be $0 after the first month. Learn More Inc.'s stock price after 1 likely will be $80.36 if the stock goes down by a factor of 0.5740. The value of the call option will always remain $0.00, irrespective of the time until expiration.
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