What Is the Put Option Premium Given the Following Information

question 66

Multiple Choice

What is the put option premium given the following information?
$\begin{array}{lrr} \text { Stock price } &\$28.00\\ \text { Strike price } &\$35.00\\ \text { Volatility } &50\%\\ \text {Dividend Yield } &0\\ \text { Time (years) } &.50\\ \text { Risk-free Rate } &3.50\%\\\end{array}$

• A)$7.49
• B)$7.98
• C)$8.28
• D)$8.76
• E)$9.64

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Definitions:

Independent

A term in statistics that describes two or more events that do not affect each other's outcomes.

Multiplicative Rule

In probability, a rule that calculates the probability of two independent events occurring together by multiplying the probability of each event.

Probability

A gauge of an event's occurrence likelihood, numerically between 0 and 1.

City Council

An elected or appointed body that governs a city, town, municipality, or local government area, making decisions on local laws, policies, and budgets.