Question
The current stock price of International Paper is $69, and the stock does not pay dividends. The instantaneous risk-free rate of return is 10%. The
The current stock price of International Paper is $69, and the stock does not pay dividends. The instantaneous risk-free rate of return is 10%. The instantaneous standard deviation of International Paper's stock is 25%. You want to purchase a PUT OPTION on this stock with an exercise price of $70 and an expiration date 73 days from now.
A- $1.50
B- $2.28
C- $2.55
D- $3.00
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Financial management theory and practice
Authors: Eugene F. Brigham and Michael C. Ehrhardt
12th Edition
978-0030243998, 30243998, 324422695, 978-0324422696
