Let S = 62, K = 55, r = 0.06, 0 = 0.35, 8= 0, T = 1, and pricing is to be done using the two-period binomial approximation (i. e. n = 2 periods). A chooser option is an exotic option that lets you choose after a certain period whether an option is a European call or a European put. Suppose that the time at which you need to choose is equal to T/2. Note that K is the strike that will apply to the call or the put depending on what is chosen. What is the price of this chooser option?

Required: 1-a. the marketing manager argues that a $5,000 increase in the monthly advertising budget would increase monthly sales by $9,000. calculate the increase or decrease in net operating income. 1-b. should the advertising budget be increased ? yes no hintsreferencesebook & resources hint #1 check my work 8.value: 1.00 pointsrequired information 2-a. refer to the original data. management is considering using higher-quality components that would increase the variable expense by $2 per unit. the marketing manager believes that the higher-quality product would increase sales by 10% per month. calculate the change in total contribution margin. 2-b. should the higher-quality components be used? yes no