What Is the Value of a 3-Month Put with a Strike

question 128

Multiple Choice

What is the value of a 3-month put with a strike price of $45 given the Black-Scholes Option Pricing Model and the following information?

• A) $3.23
• B) $3.40
• C) $3.61
• D) $4.03
• E) $4.22

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Definitions:

Selling Expenses

Costs incurred directly and indirectly from selling a product or service, including advertising, salaries for sales staff, and distribution expenses.

Inventory Expenses

Costs associated with ordering, storing, and managing inventory, including but not limited to purchase costs, storage fees, and losses due to shrinkage.

Selling Expense

Costs incurred directly and indirectly in making sales; these can include advertising, sales staff salaries, and commissions.

Periodic Inventory Method

An accounting method that updates inventory and cost of goods sold figures at the end of an accounting period, not at each sale.