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:

Date of Acquisition

The specific date on which one company officially takes control of another company in a merger or acquisition.

Consolidated Buildings

Buildings or physical structures that have been combined into one entity, often for accounting or management purposes.

Fair Value

An estimate of the market value of an asset or liability, based on current prices in an active market or through valuation techniques.