Use the Following Information to Answer the Question(s)below

question 4

Multiple Choice

Use the following information to answer the question(s) below.
(Please use a copy of the Cumulative Probabilities for the standard normal distribution for these problems. )
Taggart Transcontinental'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%.
-The Black-Scholes value of a one-year,at-the-money put option on Taggart stock is closest to:

• A)$1.45.
• B)$3.15.
• C)$4.75.
• D)$9.50.

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Definitions:

Net Monetary Assets

Financial assets that are in cash or can be quickly converted to cash, minus liabilities that are due in the short term.

Functional Currency

The main form of money used in the most significant economic setting where a business functions, utilized for its financial statements.

Exchange Rates

The value of one currency for the purpose of conversion to another, determining how much foreign currency can be obtained with a specific amount of domestic currency.

Operating Expense

Costs associated with the day-to-day operations of a business, excluding costs related to production or direct operations.