You own a lot in Key West, Florida, that is currently unused. Similar lots have recently sold for $1.5 million. Over the past five years, the price of land in the area has increased 9 percent per year, with an annual standard deviation of 20 percent. A buyer has recently approached you about buying the land in the next 10 months for $1,620,000. The risk-free rate of interest is 6 percent per year, compounded continuously. You want the option to sell the land to the buyer in one year. What is the price of the transaction today? Multiple Choice $132,290.15 $86,506.00 $138,904.66 $96,914.05 $91,298.49 You own a lot in Key West, Florida, that is currently unused. Similar lots have recently sold for $1.6 million. Over the past five years, the price of land in the area has increased 13 percent per year, with an annual standard deviation of 20 percent. A buyer has recently approached you and wants an option to buy the land in the next 8 months for $1,780,000. The risk-free rate of interest is 3 percent per year, compounded continuously. How much should you charge for the option? Multiple Choice 0 $51,365.47 0 $137,794.43 0 $32,300.25 0 $48,797.20 0 $53,933.74 $53,933.74 A call option with an exercise price of $20 and 6 months to expiration has a price of $3.83. The stock is currently priced at $17.84, and the risk-free rate is 5 percent per year, compounded continuously. What is the price of a put option with the same exercise price? Multiple Choice o $5.39 O $5.77 O $0.09 O $5.50 O $1.15 A call option has an exercise price of $83 and matures in 6 months. The current stock price is $87, and the risk-free rate is 7 percent per year, compounded continuously. What is the price of the call if the standard deviation of the stock is O percent per year? Multiple Choice $46.93 $87.00 $713 $83.00 $6.85