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5. Stock of Holiday Booking Inc. is currently selling for $29 per share. There is no possibility that the stock will be worth more than
5. Stock of Holiday Booking Inc. is currently selling for $29 per share. There is no possibility that the stock will be worth more than $30 per share in one year. T-bills currently yield 5 percent annually. There is a put option on Holiday Booking's stock with a $32 exercise price that expires in one year. This option is currently selling at $1 per share. Which of the following statements regarding this option is correct? A. this option is underpriced B. this option is overpriced C. this option is correctly priced D. there is not enough information to determine
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