Question
The current price of a non-dividend-paying stock is $40. Over the next year it is expected to rise to $42 or fall to $37. An
The current price of a non-dividend-paying stock is $40. Over the next year it is expected to rise to $42 or fall to $37. An investor buys put options with a strike price of $41. What is the value of each option? The risk-free interest rate is 2% per annum with continuous compounding.
| $1.93 | ||
| $2.93 | ||
| $0.93 | ||
| $3.93 |
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Principles Of Managerial Finance
Authors: Chad Zutter, Scott Smart
16th Global Edition
1292400641, 978-1292400648
