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Taggart Transcontinetal's stock has a volatility of 25% and a current stock price of $40 per share. Taggart pays no dividends. The risk-free interest rate
Taggart Transcontinetal's stock has a volatility of 25% and a current stock price of $40 per share. Taggart pays no dividends. The risk-free interest rate is 4%. Consider a one-year, at the money put option on Taggart stock. The effect on the price of this put option of an increase in the risk-free rate from 4% to 6% is closet to:
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