What Is the Put Option Premium Given the Following Information

question 7

Multiple Choice

What is the put option premium given the following information?
$\begin{array}{lr}\text { Time (years) } & .5 \\\text { Strike price } & \$ 25.00 \\\text { Stock price } & \$ 24.50 \\\text { Risk-free rate } & 2.00\% \\\text { Volatility } & 30\%\end{array}$

• A)$1.20
• B)$1.54
• C)$1.82
• D)$2.01
• E)$2.21

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Definitions:

Enforcement

The act of compelling compliance with a law, rule, agreement, or order.

Acceptance

In contract law, an expression of agreement to the terms of an offer that results in a binding contract between the parties.

Auctioneer

A person or entity that conducts sales in which goods or property are sold to the highest bidder.

Highest Bidder

the person or entity that offers the highest price in a bidding process, such as an auction, and is typically awarded the item or contract up for bid.