What Is the Put Option Premium Given the Following Information

question 38

Multiple Choice

What is the put option premium given the following information?
$\begin{array}{lr}\text { Time (years) } & .25 \\\text { Strike price } & \$ 40.00 \\\text { Stock price } & \$ 37.00 \\\text { Risk-free rate } & 2.00\% \\\text { Volatility } & 30\%\end{array}$

• A)$1.58
• B)$2.01
• C)$2.59
• D)$3.96
• E)$4.15

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Definitions:

Cash Receipts

The total amount of cash collected by a business during a specific period, including revenues from sales and other transactions.

Expected Sales

The forecasted quantity of products or services a business expects to sell in a specific period.

Controlling Profit

The process of managing and manipulating the revenue and expenses of a business to ensure profitability.

Evaluating Performance

The process of assessing the effectiveness and efficiency of actions or outcomes against set goals or standards.