1. Chester's turnover rate for this year is 6.30%. This rate is projected to remain the same next year and no further downsizing will occur from automating. Chester plans to spend an additional $500 beyond the extra amount above the $1000 recruiting base it spent this year. The goal of this additional investment is to improve the quality of applicants. What would the total recruiting cost be for Chester next year?
$186,275
$171,947
$143,289
$157,618
2. DERIVATIVES
The current price of a non-dividend paying stock is $30. Use a two-step tree to value a European call option on the stock with a strike price of $32 that expires in 6 months. Eachstep is 3 months, the risk free rate is 8% per annum with continuous compounding. Whatis the option price when u = 1.1 and d = 0.9? (please explain fully step by step NO JUST PASTING A TREE I want to know where you find the payoff from the option when you use it)
A. $1.29 B. $1.49 C. $1.69 D. $1.89