L15

A CALL is priced at $1.99 with an exercise of $35.00 and 64 days to expiration. What is the price of a similar PUT option with the same exercise price and time to expiration assuming a risk-free rate of 5.00% when the stock is currently priced at $35.35 ? Assurne put/call parity, continuous compounding, and 365 days per year. 1.39 1.44 1.56 1.33 1.50 An option is a wasting asset because as its expiration date approaches, its intrinsic value approaches its time value. price approaches zero. time value approaches zero. intrinsic value approaches zero