3) As a gift to your parents on their anniversary, which is three months from now, you plan to buy them tickets to the popular Broadway show "The Book of Mormon". The tickets are priced at 150$per ticket, which means you need 300$ to buy these tickets (The price of the tickets is not expectedto change over the next three months). To fund your gift, you plan to sell a stock in your portfolio.

You currently own a stock of Team America Inc.; whose current market price is 350$. This stock has an underlying risk ('sigma') of 25% and the risk-free rate is 5%. You don't want to sell the stock right now and collect the cash, since the stock might go up in the three months period. But if the price goes down then you won't be able to fund your gift. After a brief discussion with your FIN3000 instructor, you decide to buy a European Put Option with a strike price of $300. What do you think is a fair price for such a Put Option?

A) $1.70 B) $1.50 C) $1.90 D) $0.50