Suppose the stock price in the first period is still $60. In the second period, the stock price will increase to $120 with a probability 70%, and this price will continue to change in the third period, with a probability 40% of increasing to $150 and a probability 60% of decreasing to $100; in the second period, the stock price will go down to $30 with a probability 30%, and this price will also continue to change in the third period, with a probability 40% of going up to $65 and a probability 60% of going down to $20. The call option you buy will expire in the third period and the exercise price is still $70. The interest rate is still assumed to be 5%. Calculate the present value of your expected profit.

Ateam of engineers has decided to design a new shoe for people suffering from a painful foot condition. what should the engineers do during the planning stage of their project? a. look at the trial's results to see how the design can be improved. b. build a variety of shoe models. c. have patients wear the new shoe in an experimental trial to see if symptoms improve. d. estimate how much potential consumers would be willing to pay for this new shoe.

Which of the following is one of the main causes of inflation? a. wages drop so workers have to spend a higher percentage of income on necessities. b. demand drops and forces producers to charge more to meet their costs. c. rising unemployment cuts into national income. d. consumers demand goods faster than they can be supplied.

Alpine west, inc., operates a downhill ski area near lake tahoe, california. an all-day, adult ticket can be purchased for $55. adult customers also can purchase a season pass that entitles the pass holder to ski any day during the season, which typically runs from december 1 through april 30. the season pass is nontransferable, and the $450 price is nonrefundable. alpine expects its season pass holders to use their passes equally throughout the season. the company’s fiscal year ends on december 31. on november 6, 2009, jake lawson purchased a season ticket. required: 1. when should alpine west recognize revenue from the sale of its season passes? 2. prepare the appropriate journal entries that alpine would record on november 6 and december 31. 3. what will be included in the 2009 income statement and 2009 balance sheet related to the sale of the season pass to jake lawson?