The Current Price of a Non-Dividend-Paying Stock Is $40

question 2

Multiple Choice

The current price of a non-dividend-paying stock is $40.Over the next year it is expected to rise to $42 or fall to $37.An investor buys put options with a strike price of $41.What is the value of each option? The risk-free interest rate is 2% per annum with continuous compounding.

• A) $3.93
• B) $2.93
• C) $1.93
• D) $0.93

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Definitions:

Polypharmacy

The concurrent use of multiple medications by a patient, which can increase the risk of adverse drug interactions and complications.

Prescribed Medications

Medicines that are legally ordered by a healthcare professional to manage or treat a specific medical condition.

Presbycusis

Age-related hearing loss, gradually occurring as individuals grow older, affecting the ability to hear higher frequency sounds.

Urinary Tract Infection

An infection that affects parts of the urinary system including the bladder, kidneys, ureters, and urethra.